Signal Lab

Covenant & DSCR Headroom

Leverage, interest cover, and DSCR (debt service coverage ratio) vs your thresholds — with stress

Balance Sheet Risk What-ifs

Signal Lab · Model

Covenant & DSCR Headroom

Leverage, interest cover, and DSCR (debt service coverage ratio) vs editable thresholds — headroom in turns and dollars, then stress EBITDA and rates.

Illustrative AU sample until you enter actuals. Not financial advice. Lender definitions vary.

Facility inputs and covenant thresholds

Edit definitions — add-backs and cash vs accounting vary by lender. Persist locally · Jump to headroom

Interest + scheduled principal.

Used to scale interest under +bps stress.

Covenant thresholds (editable)

Ratios, headroom, and traffic lights

Inside / tight (<15% relative headroom) / breach vs your thresholds.

Equations

  • Leverage = Net Debt ÷ EBITDA · headroom turns = Max − actual · headroom $ = (Max × EBITDA) − Net Debt
  • Interest cover = EBITDA ÷ Interest · headroom turns = actual − Min
  • DSCR (debt service coverage ratio) = EBITDA ÷ Debt service · headroom turns = actual − Min · headroom $ EBITDA = EBITDA − (Min × Debt service)
  • Tight = inside covenant but relative headroom < 15% of the threshold distance

How this is calculated
  • Leverage = Net Debt ÷ EBITDA (lower is better vs a max threshold)
  • Interest cover = EBITDA ÷ Interest
  • DSCR = EBITDA ÷ Debt service (interest + scheduled principal)
  • Leverage headroom $ = capacity before breach = (threshold × EBITDA) − Net Debt
  • DSCR headroom $ = EBITDA − (min DSCR × Debt service)
  • Stress: EBITDA × (1 + shock%/100); rate stress scales Interest and the interest portion of debt service by (stressed rate ÷ current rate)

Illustrative — lender definitions vary. Not financial advice.

Stress panel

EBITDA shock and rate +bps — live stressed ratios and lights.

What-if stress

Principal = max(0, Debt service − Interest). Rate bps uses your current interest rate %.

0 to −40%. Scales EBITDA only.

Stressed rate = current % + bps/100. Scales Interest and interest-part of debt service.

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