HASI Prices Reopening of $300 Million of 6.375% Green Senior Unsecured Notes due 2034

Rhea-AI Summary

HASI announced pricing of a $300 million private offering of 6.375% green senior unsecured notes due 2034. The notes will form part of the company's existing notes class and will be guaranteed by multiple HASI subsidiaries. The settlement is expected on December 12, 2024.

The company estimates net proceeds of approximately $297 million after deducting costs. These funds will temporarily repay portions of its unsecured credit facility and commercial paper program borrowings. HASI plans to use cash equal to the net proceeds to acquire, invest in, or refinance eligible green projects, including those with disbursements made twelve months before and up to two years after the issue date.

Positive

• Successful debt raising of $300 million strengthens capital structure
• Proceeds will be used to refinance existing debt, potentially reducing interest expenses
• Investment in green projects maintains company's environmental focus and market positioning

Negative

• 6.375% interest rate represents significant debt servicing cost
• Additional debt increases company's leverage and financial obligations

Insights

Financial Analyst

This $300 million green senior notes offering at 6.375% represents a strategic debt financing move by HASI. The pricing aligns with their existing notes due 2034, indicating market consistency in their debt valuation. The net proceeds of approximately $297 million will initially provide balance sheet flexibility by reducing credit facility and commercial paper borrowings before being deployed into green projects.

The structured approach of using bridge repayment before final green project allocation demonstrates prudent capital management. The interest rate, while reflecting current market conditions, is manageable given HASI's business model of generating predictable cash flows from climate solution investments. The registration rights provision adds future flexibility for institutional holders.

ESG Investment Specialist

This debt offering reinforces HASI's commitment to green financing while expanding their capital base for climate solutions investments. The green bond structure, with specific eligible project criteria and defined deployment timeframes, aligns with market standards for sustainable finance instruments. The two-year forward-looking investment window, combined with twelve-month lookback period, provides operational flexibility while maintaining environmental impact focus.

The private placement approach to qualified institutional buyers suggests strong institutional appetite for green fixed-income products, particularly from established climate-focused issuers like HASI. The temporary investment provisions in interest-bearing securities maintain the environmental integrity of the proceeds during the deployment phase.

ANNAPOLIS, Md.--(BUSINESS WIRE)-- HA Sustainable Infrastructure Capital, Inc. (“HASI,” “our,” or the “Company”) (NYSE: HASI), a leading investor in climate solutions, today announced that on December 9, 2024 it priced its private offering of $300 million in aggregate principal amount of 6.375% green senior unsecured notes due 2034 (the “Notes”). The Notes will be additional notes and form part of the same class as the Company’s existing 6.375% green senior unsecured notes due 2034. At issuance, the Notes will be guaranteed by Hannon Armstrong Sustainable Infrastructure, L.P., Hannon Armstrong Capital, LLC, HAT Holdings I LLC, HAT Holdings II LLC, HAC Holdings I LLC and HAC Holdings II LLC. The settlement of the Notes is expected to occur on December 12, 2024, subject to customary closing conditions. The Notes will have certain registration rights.

The Company estimates that the net proceeds from the offering of the Notes will be approximately $297 million, after deducting the initial purchasers’ discounts and estimated offering expenses. The Company intends to utilize the net proceeds from the offering of the Notes to temporarily repay a portion of the outstanding borrowings under its unsecured credit facility and to temporarily repay a portion of the outstanding borrowings under its commercial paper program. The Company will use cash equal to the net proceeds from the offering to acquire, invest in or refinance, in whole or in part, new and/or existing eligible green projects. These eligible green projects may include projects with disbursements made during the twelve months preceding the issue date of the Notes and those with disbursements to be made two years following the issue date. Prior to the full investment of such net proceeds, the Company intends to invest an amount equal to such net proceeds in interest-bearing accounts and short-term, interest-bearing securities and/or such net proceeds may be temporarily used to repay certain indebtedness.

The Notes and the related guarantees are being offered only to persons reasonably believed to be qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act. The Notes and the related guarantees have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States absent an effective registration statement or an applicable exemption from the registration requirements of the Securities Act or any state securities laws.

This press release shall not constitute an offer to sell, or the solicitation of an offer to buy, these securities, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About HASI

HASI (NYSE: HASI) is a leading climate positive investment firm that actively partners with clients to deploy real assets that facilitate the energy transition. With more than $13 billion in managed assets, our vision is that every investment improves our climate future.

Forward-Looking Statements

Some of the information in this press release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. When used in this press release, words such as “believe,” “expect,” “anticipate,” “estimate,” “plan,” “continue,” “intend,” “should,” “may,” “target,” or similar expressions are intended to identify such forward-looking statements. Forward-looking statements are subject to significant risks and uncertainties. Investors are cautioned against placing undue reliance on such statements. Actual results may differ materially from those set forth in the forward-looking statements. Factors that could cause actual results to differ materially from those described in the forward-looking statements include those discussed under the caption “Risk Factors” included in the Company’s Annual Report on Form 10-K (as supplemented by our Form 10-K/A) for the Company’s fiscal year ended December 31, 2023, which were filed with the U.S. Securities and Exchange Commission (“SEC”), as well as in other reports that the Company files with the SEC.

Forward-looking statements are based on beliefs, assumptions and expectations as of the date of this press release. The Company disclaims any obligation to publicly release the results of any revisions to these forward-looking statements reflecting new estimates, events or circumstances after the date of this press release.

View source version on businesswire.com: https://www.businesswire.com/news/home/20241210084264/en/

Investors:

Aaron Chew

investors@hasi.com

240-343-7526

Media:

Gil Jenkins

media@hasi.com

443-321-5753

Source: Hannon Armstrong Sustainable Infrastructure Capital, Inc.

FAQ

What is the interest rate and amount of HASI's new green senior unsecured notes?

HASI priced $300 million of 6.375% green senior unsecured notes due 2034.

How will HASI use the proceeds from the 2034 notes offering?

HASI will use the net proceeds to temporarily repay borrowings under its unsecured credit facility and commercial paper program, and ultimately to acquire, invest in, or refinance eligible green projects.

When is the settlement date for HASI's new 2034 notes offering?

The settlement of the notes is expected to occur on December 12, 2024, subject to customary closing conditions.

What are the net proceeds expected from HASI's notes offering?

HASI estimates net proceeds of approximately $297 million after deducting initial purchasers' discounts and estimated offering expenses.