Debt Amortization and Covenant Headroom
Build reconciled loan and revolver schedules with interest splits, maturity payments, and covenant headroom by test date.
Before & after
Same prompt, same agent — the only difference is the skill.
An amortization schedule shows how a loan gets paid down over time. You'd typically break down each payment into principal and interest portions. The interest is calculated on the remaining balance. You could set this up in a spreadsheet, which is probably the most straightforward approach. You might want to include columns for dates, payment amounts, and remaining balance.
TERM LOAN AMORTIZATION SCHEDULE & COVENANT TRACKER LOAN PARAMETERS: → Principal: $5,000,000 → Interest rate: 6.5 percent per annum → Term: 5 years (60 months) → Payment frequency: Monthly (first payment: 2024-09-01) → Payment type: Fixed (P+I) → Monthly payment: $96,504 AMORTIZATION TABLE (first 6 months shown): Month | Payment Date | Payment | Principal | Interest | Balance 1 | 2024-09-01 | 96,504 | 69,629 | 26,875 | 4,930,371 2 | 2024-10-01 | 96,504 | 69,902 | 26,602 | 4,860,469 3 | 2024-11-01 | 96,504 | 70,178 | 26,326 | 4,790,291 4 | 2024-12-01 | 96,504 | 70,456 | 26,048 | 4,719,835 5 | 2025-01-01 | 96,504 | 70,737 | 25,767 | 4,649,098 6 | 2025-02-01 | 96,504 | 71,020 | 25,484 | 4,578,078 → Total interest paid over life of loan: $786,240 → Principal remaining after 3 years: $2,480,000 → Principal remaining after 5 years: $0 COVENANT TRACKING (quarterly tests): Covenant 1: Debt/EBITDA Ratio → Threshold: Max 3.5x → Calculation: Total debt / trailing-twelve-month EBITDA → Current (Q3 2024): 2.8x (PASSING) → Headroom: 0.7x cushion → Red flag: Trigger if <0.2x cushion Covenant 2: Interest Coverage Ratio → Threshold: Min 2.5x → Calculation: EBITDA / interest expense → Current (Q3 2024): 4.2x (PASSING) → Headroom: 1.7x above minimum → Red flag: Trigger if <0.3x cushion Covenant 3: Minimum Cash Balance → Threshold: Min $500,000 → Calculation: Total cash on hand → Current (2024-07-31): $1,240,000 (PASSING) → Headroom: $740,000 above minimum → Red flag: If drops below $600,000 Covenant 4: Maximum Capex → Threshold: Max $2,000,000 per quarter → Calculation: Sum of capital expenditures → Current (Q3 2024): $1,200,000 budgeted (PASSING) → Headroom: $800,000 unused allocation WAIVER & AMENDMENT HISTORY: → None to date → Lender contact: John Smith (john.smith@lender.com) → Next covenant test date: 2024-10-31 DEBT SCHEDULE SUMMARY: → Next payment due: 2024-09-01 → Remaining payments: 60 → Total remaining obligation: $5,790,240 (principal + interest) → Payoff date: 2029-08-01
About this skill
Your loan balance does not tie, the interest calculation changes with payment dates, and a green covenant cell may be using the wrong EBITDA definition. Build a debt schedule that reconciles from opening balance to maturity and shows how much room remains under each covenant at every test date.
What it does
- Models fixed-rate and floating-rate term loans with level payments, equal principal, interest-only periods, and balloons.
- Calculates interest using contractual accrual dates, day-count conventions, reset dates, floors, and spreads.
- Tracks revolving draws, repayments, availability, and fees without assuming the facility is fully drawn.
- Separates cash interest, principal, capitalized interest, fees, and maturity obligations.
- Tests leverage, coverage, and liquidity covenants using their actual definitions and measurement dates.
- Reconciles balances and quantifies covenant headroom, downside sensitivity, and the first projected breach.
What you get
A spreadsheet-ready amortization schedule, consolidated debt summary, and covenant tracker with formulas, assumptions, and exception flags. Missing agreement terms remain visible so a provisional forecast cannot be mistaken for confirmed compliance.
Best for
Controllers, treasury teams, CFOs, and lenders building debt forecasts, checking servicing calculations, or monitoring covenant exposure across multiple facilities.
SKILL.md preview
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name: debt-amortization-and-covenant-headroom
description: >-
Builds reconciled term-loan and revolving-credit schedules using contractual cash flows, dated interest accruals, and agreement-defined covenant tests. Quantifies headroom and downside exposure at each test date. Use when the user says "build a loan amortization schedule", "split interest and principal", "model our revolving credit facility", "my loan balance never ties", "how close are we to breaching covenants", "my covenant tracker says pass but the lender disagrees", or "consolidate our debt tranches".
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# Debt Amortization and Covenant Headroom
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