06/05/2026
In project finance, you don't choose your maximum debt, the governing case chooses it for you.
When you are funding a massive infrastructure or energy asset, lenders don’t care about your best-case scenario. They care about their worst-case exposure. Because these deals rely entirely on a project’s future cash flows rather than a corporate balance sheet, lenders stress-test every variable until they find the absolute bottleneck.
That bottleneck is the Governing Case—the single, most conservative scenario that produces the lowest debt capacity, dictating your entire financing structure.
In our latest educational video, we break down exactly how this binding constraint works and how it shapes the deal.
Here is what you’ll learn:
📉 The Core Bottleneck: Why the scenario yielding the lowest debt sizing becomes the law of the deal.
⚙️ The 5 Critical Constraints: How financial models evaluate DSCR, LLCR, PLCR, tail periods, and breakeven stress tests to find the breaking point.
💼 The Impact on Structuring: How the governing case forces the balance between senior debt limits and the equity contributions sponsors must bring to the table.
🤝 The Negotiation Tug-of-War: How sponsors push back on overly conservative assumptions while lenders protect their downside risk.
If you are building financial models or structuring structured finance deals, understanding how to identify and manage the governing case is a non-negotiable skill.
🎬 Watch the full breakdown here: https://www.youtube.com/watch?v=5k9pI0a_Ik8
📖 For More Resources Check Out: www.pivotal180.comIf you are pursuing a career in Investment Banking, Infrastructure Funds, or Energy Development, understan...