Sponsors like to show that a project supports a lot of debt. It lowers the equity cheque and lifts the equity IRR. It also means the project has less room when volume, price, or timing miss.

Sculpting follows the base case

Debt that is sculpted to the lender's base case will look comfortable in that case and tight in every other one. Ask for the downside the lender used, not only the ratio in the marketing case. A debt service cover that clears by a small margin is a project that cannot have a bad year.

Equity is the shock absorber

If the structure has no cash sweep buffer, no reserve, and a distribution lockup at the first miss, equity is not being paid to wait. It is being paid to fund the miss. Size your commitment with that job in mind.

A project that only works at the debt size in the teaser is a project that has already spent its margin.