Hannon Armstrong Sustainable Infrastructure Capital, Inc.
(“HASI,” “we,” “our,” or the “Company”) (NYSE: HASI), a leading
investor in climate solutions, today announced, subject to market
conditions, a private offering of $350 million in aggregate
principal amount of green exchangeable senior unsecured notes due
2028 (the “Notes”) by its indirect subsidiaries, HAT Holdings I LLC
(“HAT I”) and HAT Holdings II LLC (“HAT II,” and together with HAT
I, the “Issuers”). At issuance, the Notes will be guaranteed by the
Company, Hannon Armstrong Sustainable Infrastructure, L.P. and
Hannon Armstrong Capital, LLC. The Issuers also expect to grant the
initial purchasers of the Notes an option to purchase, during the
13-day period beginning on, and including the first date on which
the Notes are issued, up to $52.5 million additional aggregate
principal amount of the Notes.
The Company may use a portion of the net proceeds from this
offering to repurchase certain of the 2023 Convertible Notes as
described below. Additionally, the Company intends to use cash on
hand to enter into privately negotiated capped call transactions as
described below. The Company intends to allocate an amount equal to
the net proceeds of the offering to acquire, invest in or
refinance, in whole or in part, new and/or existing eligible green
projects. Investment opportunities have already been identified and
are consistent with the Company’s normal course investment profile.
In addition, 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
following the issue date. Prior to the full investment of such net
proceeds, the Company intends to invest such net proceeds in
interest-bearing accounts and short-term, interest-bearing
securities which are consistent with the Company’s intention to
continue to qualify for taxation as a REIT.
The Notes will accrue interest payable semi-annually in arrears
on February 15 and August 15 of each year, beginning on February
15, 2024 until the maturity date, unless the Notes are earlier
repurchased, redeemed or exchanged in accordance with their terms
prior to such date. Upon any exchange of the Notes, holders will
receive cash, shares of common stock, $0.01 par value per share
(the “Common Stock”) or a combination of cash and shares of Common
Stock, at the Company’s election, based on the exchange rate for
the Notes. The exchange rate will be subject to adjustment upon the
occurrence of certain events, but will not be adjusted for any
accrued and unpaid interest. The Company may redeem the Notes if
HASI’s board of directors determines such redemption is reasonably
necessary to preserve its qualification as a REIT or, in whole or
in part, at the Company’s option, on or after August 20, 2026 and
prior to the 62nd scheduled trading day immediately preceding the
maturity date, under certain circumstances. Any shares of Common
Stock issuable upon exchange of the Notes will have certain
registration rights. The interest rate, exchange rate and other
terms of the Notes are to be determined upon pricing of the
offering.
Contemporaneously with the pricing of the Notes in the offering,
the Company may enter into separate and individually negotiated
transactions with certain holders of its 0.00% Convertible Senior
Notes due 2023 (the “2023 Convertible Notes”) to repurchase for
cash certain of the 2023 Convertible Notes (the “concurrent note
repurchases”). The terms of any concurrent note repurchases are
anticipated to be individually negotiated with each holder of the
2023 Convertible Notes and will depend on several factors,
including the market price of the Common Stock and the trading
price of the 2023 Convertible Notes at the time of each such
concurrent note repurchase. No assurance can be given as to how
much, if any, of the 2023 Convertible Notes will be repurchased or
the terms on which they will be repurchased. The Company expects
that certain holders of any 2023 Convertible Notes that the Company
agrees to repurchase that have hedged their equity price risk with
respect to such 2023 Convertible Notes will, concurrently with the
pricing of the Notes offered hereby, unwind all or part of their
hedge positions by buying the Common Stock and/or entering into or
various unwinding derivative transactions with respect to the
Common Stock.
Any repurchase of the 2023 Convertible Notes, and the potential
related market activities by holders of the 2023 Convertible Notes
participating in the concurrent note repurchases, could increase
(or reduce the size of any decrease in) the market price of the
Common Stock, which may affect the trading price of the Notes at
that time and the initial exchange price of the Notes. The Company
cannot predict the magnitude of such market activity or the overall
effect it will have on the price of the Notes or the Common
Stock.
In connection with the pricing of the Notes, the Company expects
the Issuers will enter into privately negotiated capped call
transactions with one or more of the initial purchasers or their
respective affiliates or other financial institutions (the “option
counterparties”). The capped call transactions are expected to
cover, subject to customary anti-dilution adjustments substantially
similar to those applicable to the Notes, the same number of shares
of the Common Stock that will initially underly the Notes.
The capped call transactions are expected generally to reduce
the potential dilution to the Company’s common and/or offset
potential cash payments the Issuers are required to make in excess
of the principal amount, in each case, upon any exchange of the
Notes, with such reduction and/or offset subject to a cap. If the
market price per share of Common Stock, as measured under the terms
of the capped call transactions, exceeds the cap price of the
capped call transactions, there would nevertheless be dilution
and/or there would not be an offset of such potential cash
payments, in each case, to the extent that such market price
exceeds the cap price of the capped call transactions.
In connection with establishing their initial hedges of the
capped call transactions, the option counterparties (and/or their
respective affiliates) have advised the Issuers that they expect to
enter into various derivative transactions with respect to the
Common Stock and/or purchase shares of Common Stock or other
securities of the Company or the Issuers in secondary market
transactions concurrently with or shortly after the pricing of the
Notes, including with certain investors in the Notes. This activity
could increase (or reduce the size of any decrease in) the market
price of the Common Stock or the Notes at that time.
In addition, the option counterparties (and/or their respective
affiliates) may modify their hedge positions by entering into or
unwinding various derivatives with respect to the Common Stock
and/or purchasing or selling shares of the Common Stock or other
securities of the Company or the Issuers in secondary market
transactions following the pricing of the Notes and prior to the
maturity of the Notes (and are likely to do so during any
observation period related to an exchange of Notes or following any
early exchange, redemption or repurchase of Notes). The effect, if
any, of these activities on the market price of the Common Stock or
the Notes will depend in part on market conditions and cannot be
ascertained at this time, but this activity could also cause or
avoid an increase or decrease in the market price of the Common
Stock or the Notes, which could affect the holders’ ability to
exchange the Notes, and it could affect the amount of cash and/or
the number and value of the shares of the Common Stock holders
receive upon exchange of the Notes.
The Notes and the related guarantees will be 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”). The Notes and the related guarantees will
not be 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 public company
that actively partners with clients to deploy real assets that
facilitate the energy transition. With more than $10 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, 2022,
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.
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INVESTOR RELATIONS INQUIRIES Neha Gaddam 410-571-6189
investors@hasi.com
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