Hannon Armstrong Sustainable Infrastructure Capital, a provider of debt and equity financing to the energy efficiency and renewable energy markets, has completed an offering of A-rated (Kroll) Sustainable Yield Bonds issued by its indirect subsidiary and secured by a portion of its utility scale solar and wind real estate related assets. The transaction was certified by the Alliance to Save Energy's CarbonCount,with a score of 0.39 metric tons of greenhouse gas emissions reduced annually per $1,000 of investment.
Jeffrey Eckel, President & CEO, stated:
"The 19 year tenor allows us to lock-in historically low interest rates in accordance with our plan to move to 50% to 70% fixed rate debt. This is our second debt transaction to disclose the estimated annual reduction of greenhouse gas emissions and the first to receive a CarbonCount score, which allows investors to easily measure a green bond's carbon impact, just as they can evaluate interest rate and credit quality."
The bonds consist of a senior class of bonds (Class A Bonds) in an aggregate principal amount of US$100,500,000 with an interest rate of 4.28%. The junior class of bonds (Class B Bonds) consists of US$18,112,000 aggregate principal amount with an interest rate of 5.00% and was retained by the company. Both classes of notes have an anticipated repayment date in October 2034. Hannon Armstrong Capital, LLC, the operating subsidiary of the company, will act as servicer for the securitization.
The Class A Bonds received an investment grade rating of A and the Class B Bonds received a rating of BBB from the Kroll Bond Rating Agency, Inc. The company believes that the rating reflects the predictability and quality of the cash flows of the underlying assets, with strong, experienced publicly rated project sponsors and off-takers. This is a new asset class in the asset-backed securities market and the first Hannon Armstrong issuance to achieve a public investment grade rating. Bank of America Merrill Lynch acted as structuring agent for the offering.