Mezzanine Balance | Paper LBO Model

I am not familiar with mezzanine financing but I am interested in knowing why the outstanding balance in Option B of the model keeps increasing each year (45 in Y1 to 50 in Y5).

I thought it would stay at 45 and I would only pay the 12% interest each year. Clearly there are some payments going on as the EB of senior debt is lower each year compared to option A which means that some cash is going somewhere but at the same time the EB of mezzanine is going up.

Link in case the image doesn't load:https://imgur.com/a/BLrR2jF

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Comments (3)

Jan 15, 2021 - 10:56am

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