Mezzanine, convertible bonds, reverse convertibles, preferred shares
Earnings before interest, taxes, depreciation and amortisation (‘EBITDA’), largely determine the maximum amount of senior debt a company can assume. Increased equity can complete the capital structure. Equity, however, is the most expensive and most dilutive form of capital.
Hybrids provide access to capital that is cheaper than equity and more flexible than bank lending. It may be regarded as equity, but with the advantage of tax deductibility for fixed-income interest payments.