Hannon Armstrong Sustainable Infrastructure Capital completes $84 million offering of sustainable bonds

Written By: Stratton Report
March 27, 2017

Hannon Armstrong

On March 27, Hannon Armstrong Sustainable Infrastructure Capital, Inc. announced it had completed a $84 million offering of sustainable yield bonds for which BlackRock arranged institutional financing.

According to the firm, the SYBs were issued by an indirect subsidiary of Hannon Armstrong and financed efficiency and solar assets in over 90 public schools and over 20 local government properties across four different states. 

Hannon stressed that the non-recourse bonds, issued at par, have a 4.35% fixed rate coupon and a 20-year life and have a CarbonCount score of 0.27 metric tons of greenhouse gas per $1,000.

Jeffrey Eckel, President & CEO of Hannon Armstrong noted: “By issuing SYBs we are able to increase our leverage and the amount of fixed-rate debt, moving us towards our targets of 2.5:1 leverage and 60%-85% fixed-rate debt. With a 0.27 CarbonCount rating, investors have a quantitative measure of impact.  In addition, achieving Moody’s highest green bond assessment provides additional investor comfort that while they are making sound financial investments, the investments also have a positive environmental profile.”

Jeetu Balchandani, Head of the North American Infrastructure Debt team at BlackRock observed:

As part of BlackRock’s commitment to sustainability, we are pleased to partner with Hannon Armstrong on a project with such tangible impact. We are confident that this high-quality transaction will deliver value for our clients.

Per Hannon, Moody’s Investors Service assigned the notes a green bond assessment of GB1, which is the highest GBA grade. 

Tiphany Lee-Allen, Assistant Vice President – Analyst, Public Finance Group at Moody’s remarked: “The transaction achieves the highest weighted score corresponding to a GB1 Grade due, in part, to the fact that all of the proceeds from the green bond offering will be allocated to eligible environmentally beneficial projects based on Hannon Armstrong’s criteria for selection. Considered by an experienced team benefiting from a long management tenure with a focus on achieving GHG reductions and other environmental benefits, only projects that are net neutral or positive in nature are considered.”

Kateri Callahan, president of the Alliance to Save Energy, which developed and owns the CarbonCount scoring tool, commented: “The CarbonCount score reflects the energy and environmental benefits of the assets, which are expected to annually offset over 24,000 metric tons of carbon dioxide emissions and save over 34 million gallons of water.”