Distribution Lock-Up
The covenant that traps cash inside a project company when coverage falls below a threshold (commonly a DSCR of 1.10x to 1.20x, set above the default level). Distributions to equity stop, the cash accumulates in the project, and it is released only when the test passes again. A model that pays equity through a lock-up overstates the equity return.
Where Distribution Lock-Up comes up
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