Coverage ratios
DSCR, LLCR and PLCR.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: coverage ratios.Updated 30 September 2026
Part of project finance and infrastructure models, with the models, labs and guides around it.
What it does
Three ratios on the same cash flows. DSCR is the period test, cash available over service in that period, reported as a minimum and an average across the tenor. LLCR takes the whole-loan view: the present value of the CFADS remaining inside the tenor over the balance outstanding. PLCR extends the same calculation to the end of the project life, crediting the tail after maturity. A model that quotes only the average DSCR has hidden the period the lender cares about.
Where it lives
The same schedule in each model that carries it, with the rows to open. Open a model in the browser, go to the sheet, and click the lines.
- Debt, rows 20–25: DSCR, sensitivity case, LLCR, CFADS within the debt tenor, PLCR…
- Returns, rows 23–27: Minimum DSCR, O1 to O30, Average DSCR, O1 to O30, LLCR at commercial operation, PLCR at commercial operation…
- Assumptions, row 18: Lenders’ minimum DSCR
- Debt, rows 17–22: DSCR, DSCR for the minimum test, Minimum DSCR over the tenor, Average DSCR over the tenor…
What a reviewer looks for
- Discounting the LLCR numerator at the equity rate rather than the loan rate.
- A PLCR quoted as if it were an LLCR, so the tail flatters the loan.
- The minimum DSCR read off an annual model.
Learn it, then build it
Build · Lab · ~12 min
DSCR Sculpting
Sculpt debt service to CFADS at a target DSCR, size the loan as its present value, split a payment into interest and principal, and explain why a level repayment profile fails a project lender.
Read · Guide · 12 min
Project Finance Modelling: Cash Flow Waterfalls, DSCR Sizing and the Debt Sculpt
Read · Guide · 11 min
Credit and Covenant Modelling: What a Lender Actually Tests
Vocabulary: DSCR (Debt Service Coverage Ratio), LLCR (Loan Life Coverage Ratio).