Debt sculpting
Service shaped to CFADS at a target DSCR.
By Surojit Chakraverti, founder of L3VLUP and an investor running a long-short healthcare and technology equities strategy.
On this subject: debt sculpting.Updated 30 September 2026
Part of project finance and infrastructure models, with the models, labs and guides around it.
What it does
Project debt is sized to coverage, not to a multiple. Debt service in each tenor period is set to that period’s CFADS divided by the target DSCR, so the repayment profile follows the cash; the loan that schedule supports is its present value at the loan rate; interest is charged on the opening balance and principal is whatever is left of the service. Written this way the schedule is closed-form and the balance closes to zero at maturity as an identity.
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.
- Assumptions, rows 18–21: All-in interest rate, annual, Target DSCR, Lock-up DSCR, DSRA requirement
- Debt, rows 6–9: Debt repayment period flag, Sculpted debt service, Interest rate per half-year, Debt supported
- Debt, rows 12–17: Opening balance, Drawn in construction, Interest, Principal repaid…
What a reviewer looks for
- A flat amortisation profile on lumpy cash flows, which wastes debt capacity in strong years and breaches coverage in weak ones.
- Sculpting to a case that already includes the tax shield of the debt being sized, so the sheet iterates and nobody says so.
- Reporting average DSCR without the minimum.
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: Debt Sculpting, DSCR (Debt Service Coverage Ratio).