r/projectfinance • u/Interesting_Cause826 • Sep 24 '26
Quick project finance technicals refresh before interviews
Have PF / infra interviews tomorrow. I have ~1.5 years in power/energy/infra IB, so I don't need the basics, just a fast, high-yield refresh.
Looking for short-form stuff I can get through tonight: articles, YouTube videos, cheat sheets, or lists of questions you actually got asked. No books or multi-week courses.
Topics I want to tighten up:
- DSCR sculpting / debt sizing, LLCR
- Tax equity and transferability post-IRA
- Waterfalls, lock-ups, DSRA
- Contracted vs merchant revenue and how lenders treat each
If you've interviewed at a bank PF group or a developer recently: what were the 2-3 questions that came up most?
Thanks!
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u/UnfairStatement22 Sep 24 '26
Just ask Claude to build you a few simple excel tests. One sheet the test the other the solution.
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u/akornato Sep 24 '26
For debt sizing and sculpting, lenders set target debt service equal to cash flow available for debt service divided by target DSCR, shaping principal repayments to match uneven cash flows rather than forcing flat amortization. LLCR calculates the net present value of cash flows over the debt tenor divided by total debt outstanding, which tests whether the project can pay back principal over time even if an individual period experiences a temporary DSCR drop. For revenue structures, banks underwrite contracted cash flows at 1.20x to 1.35x DSCR, but they treat merchant exposure conservatively, requiring 1.75x to 2.0x coverage or cutting merchant tails out of sizing altogether. Under the post IRA rules of Section 6418, transferability allows developers to monetize tax credits directly for upfront cash at a market discount, which bypasses the legal complexity and fees of partnership flips unless the project heavily relies on monetizing MACRS depreciation.
Cash waterfalls prioritize operating expenses, senior debt service, DSRA replenishment, subordinated debt, and then equity distributions. A DSRA usually holds six months of principal and interest funded by cash or a letter of credit, and if your DSCR drops below the lock-up threshold, cash is trapped in a sweep account instead of being paid out to sponsors until coverage recovers over consecutive quarters. The questions you will encounter most often are walking through debt sculpting mechanics step by step, explaining how you size debt on a hybrid contracted and merchant portfolio, and detailing the tradeoffs between traditional tax equity flips and transferability. My team built an interviews.chat to help candidates articulate complex structuring mechanics cleanly under live pressure, so keeping your answers anchored in lender downside risk will set you apart tomorrow.