Volumes of European mezzanine have rocketed in the past six years. From just a few hundred million euros in the late 1990s, volumes swelled to €3.3bn ($4.1bn) in 2003, according to Standard & Poor's, the rating agency.

Deal size has grown apace. James Davis, investment director at Intermediate Capital Group (ICG), said: "Four years ago, €150m was a stretch for the mezzanine market. This figure has more than doubled and a €500m mezzanine tranche would be possible today for the right deal." For many sponsors, mezzanine has replaced high-yield bonds as the subordinated debt instrument of choice.