The DSCR and LLCR: The North Stars of Project Finance?

[@financialmodeling]

Files & Resources: breakingintowallstreet.com/kb/project-finance/debt-service-coverage-ratio/ breakingintowallstreet.com/kb/project-finance/loan-life-coverage-ratio/ Table of Contents: 0:00 Introduction 0:42 The Short Version 4:30 Part 1: Debt Sculpting and Sizing Uses (Quick Review) 6:28 Part 2: Additional Items and Complexities 9:24 Part 3: Variable Dates and Discount Rates 11:22 Part 4: Multiple Debt Tranches 12:51 Part 5: The DSCR and LLCR in Covenant Analysis 14:47 Recap and Summary

[@aabdelaal168]

Great illustration as always. Can you please illustrate the difference between project IRR vs Sponsor equity IRR in next episodes of project finance?

[@financialmodeling]

Thanks! Project IRR is just the IRR as if there's no leverage used, so you remove the debt, interest, principal repayments, etc. It should be lower for projects that perform well.

[@xhesitase9729]

Hey Brian, could you share your thoughts on the CFA certification, what it entails, and whether you think it's worth the time for someone considering a career in finance/investments?

[@financialmodeling]

We've covered this topic many times: mergersandinquisitions.com/cfa-for-investment-banking/ mergersandinquisitions.com/investment-banking-certification/

[@arifarafat999]

question - Why Debt balance not discounted?

[@financialmodeling]

The current Debt balance equals the Present Value of all future Interest Payments + Principal Repayments at the interest rate on the Debt, so it is actually discounted if you think about it like that.