Mezzanine debt is a highly negotiated instrument between the issuer and investors. It is tailored to meet the financing needs of the specific transaction and required investors return. As such it allows for great flexibility in structuring terms. It provides incremental capital at a cost below that of equity, which enables stretching of leverage levels and purchase price when alternative capital sources are inaccessible. Mezzanine debt has embedded equity instruments, usually warrants attached to it.