HASI Announces Proposed Private Offering of $350 Million Green Exchangeable Senior Unsecured Notes and Intention to Enter into Capped Call Transactions

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.