Item 1.01. Entry into a Material Definitive Agreement.
Indenture and 3.750% Senior Notes due 2030
On
The Company believes the Notes meet the environmental eligibility criteria for
green bonds as defined by the
The Notes bear interest at a rate of 3.750% per year, payable semi-annually in
arrears on
The following is a brief description of the terms of the Notes and the Indenture.
Change of Control
If a Change of Control Triggering Event (as defined in the Indenture) occurs, the Issuers will be required (unless the Issuers have exercised their right to redeem all of the Notes by sending a notice of redemption) to offer to repurchase all of the outstanding Notes at a purchase price equal to 101% of the principal amount thereof plus accrued but unpaid interest to, but excluding, the applicable Change of Control Payment Date (as defined in the Indenture).
Optional Redemption
The Issuers may redeem some or all of the Notes, at the Issuers' option, at any time and from time to time at a price equal to 100% of the principal amount thereof, plus the applicable "make-whole" premium as of, together with accrued but unpaid interest, if any, to, but excluding, the applicable date of redemption.
In addition, prior to
Guarantees
When the Notes are first issued they will be guaranteed solely by the Guarantors. None of the Company's other subsidiaries will be required to guarantee the Notes in the future, except that, under certain circumstances and subject to certain exceptions set forth in the Indenture, one or more of the Company's Domestic Subsidiaries (as defined in the Indenture) (except for Excluded Subsidiaries or Securitization Entities (each as defined in the Indenture)) may be required to guarantee the payment of the Notes (the "Springing Guarantee Covenant").
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Ranking The Notes will be: • senior unsecured obligations of the Issuers; • pari passu in right of payment with all of the Issuers' existing and future senior unsecured indebtedness and senior unsecured guarantees; • effectively subordinated in right of payment to all of the Issuers' existing and future secured indebtedness and secured guarantees to the extent of the value of the assets securing such indebtedness and guarantees; • senior in right of payment to any of the Issuers' future subordinated indebtedness and subordinated guarantees; and • effectively subordinated in right of payment to all existing and future indebtedness, guarantees and other liabilities (including trade payables) and any preferred equity of the Issuers' subsidiaries (other than any Domestic Subsidiaries that may become guarantors of the Notes).
The guarantee from each Guarantor will be:
• a senior unsecured obligation of such guarantor; • pari passu in right of payment with all existing and future senior unsecured indebtedness and senior unsecured guarantees of such guarantor; • effectively subordinated in right of payment to all existing and future secured indebtedness and secured guarantees of such guarantor to the extent of the value of the assets securing such indebtedness and guarantees; • senior in right of payment to any future subordinated indebtedness and subordinated guarantees of such guarantor, and • effectively subordinated in right of payment to all existing and future indebtedness, guarantees and other liabilities (including trade payables) and any preferred equity of the Guarantors' subsidiaries (other than any subsidiaries that may become guarantors of the Notes).
The Guarantors' guarantees of the Notes (other than the Company's guarantee) and any guaranty of the Notes made by a Domestic Subsidiary pursuant to the Springing Guarantee Covenant and all other obligations of such guarantor under the Indenture will automatically terminate and such guarantor will automatically be released from all of its obligations under such guarantee and the Indenture under certain circumstances set forth in the Indenture, which may include the permanent termination and release of such guarantee and obligations on and after any date (the "Covenant Termination Date") that (a) the Notes have investment grade credit ratings from each of two specified rating agencies and (b) no Default or Event of Default (each as defined in the Indenture) has occurred and is continuing. The Springing Guarantee Covenant will also automatically and permanently terminate and be of no further force and effect on and after the Covenant Termination Date.
Covenants
The Indenture contains covenants that, subject to a number of exceptions and adjustments, among other things:
• limit the ability of the Company and its subsidiaries to incur additional indebtedness; -3-
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• require that the Company and its subsidiaries maintain Total Unencumbered Assets (as defined in the Indenture) of not less than 120% of the aggregate principal amount of the outstanding Unsecured Indebtedness (as defined in the Indenture) of the Company and its subsidiaries; and • impose certain requirements in order for the Company to merge or consolidate with or transfer all or substantially all of our assets to another person.
Certain of these covenants will automatically and permanently terminate and will be of no force or effect on and after the Covenant Termination Date (as defined above).
Events of Default
The Indenture also provides for Events of Default which, if any of them occurs, would permit or require the principal of and accrued and unpaid interest on all the outstanding Notes to become or to be declared due and payable.
The preceding description is qualified in its entirety by reference to the Indenture, a copy of which is attached as Exhibit 4.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation Under an
Off-Balance Sheet Arrangement of a Registrant.
The information required by this Item 2.03 relating to the Notes and the Indenture is contained in Item 1.01 above and is incorporated herein by reference.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits. Exhibit No. Description 4.1 Indenture, dated as ofAugust 25, 2020 , betweenHAT Holdings I LLC andHAT Holdings II LLC , as issuers, andHannon Armstrong Sustainable Infrastructure Capital, Inc. ,Hannon Armstrong Sustainable Infrastructure, L.P. , andHannon Armstrong Capital, LLC , as guarantors, andU.S. Bank National Association , as trustee (including the form ofHAT Holdings I LLC and HAT Holdings II LLC's 3.750% Senior Notes due 2030). 104 Cover Page Interactive Data File (embedded within the Inline XBRL document). -4-
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