It is also very important to carefully evaluate the mortgage arrangement obtained by mezzanine financing providers and their ability to enforce the agreement (priority lenders usually limit the ability of mezzanine financing lenders to enforce the mortgage through agreements between creditors).
Priority lenders usually limit the level of cash flowing to mezzanine financing providers through strict agreements, while borrowers usually prepay most of the excess cash to priority lenders as reserves. They also need to make a detailed assessment of the borrower's repayment ability (such as the payment method of interest, dividend distribution or asset disposal).
Mezzanine investments in Asia are usually cross-border transactions, so borrowers need to be carefully evaluated to determine their remittance ability (especially in China). Investors must also have a deep understanding of withholding tax and regional tax agreements.
In some areas (such as the implementation of ECB standards in India), international financing providers are still restricted in using high-yield financial instruments, and financing providers must carefully evaluate some restrictions.