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A covenant at the solar SPV

Project finance · Fictional case

The situation

A fictional solar project has ₹108 crore of annual cash available for debt service. Scheduled interest and principal total ₹100 crore. The covenant requires DSCR of at least 1.20×. A permitted restructuring can move some principal to a later period.

The decision

Ignoring fees and interest changes for this period, what is the smallest amount of debt service that must move to meet the covenant?

Study debt service coverage