Q3 2020 Hannon Armstrong Sustainable Infrastructure Capital Inc Earnings Call

This information is not intended to be considered in isolation or as a substitute for the financial information presented in accordance with GAAP. A reconciliation of GAAP to non-GAAP financial measures is available on our posted earnings release and slide presentation.

Main thankfully in good physical health.

Furthermore, we are counting on a kind of a continuing our SG leadership, we've been using carbon count since 2013 in order to measure the efficiency with which our capital is reducing carbon with our recent membership in the partnership for carbon accounting financials or PKF, we have joined with over 70 financial.

12 months pipeline, which remains greater than two and a half billion dollars, even as we converted the 500 million Angie transaction from the pipeline to an investment.

We continue to see strong growth in virtually every one of the approximately 10 and markets where we invest.

The behind the meter portion of our pipeline remains very strong and is weighted towards energy efficiency opportunities in the governmental and industrial sectors.

In addition, residential CNI and community solar pipelines remains strong and increasingly include storage component.

The grid connected portion of similarly, well balance between wind and solar including solar land.

Finally, we continue to source climate resilience opportunities is reflected in are sustainable infrastructure pipeline.

On slide five we detail or 2.2 billion dollar balance sheet portfolio at the end of the third quarter.

Let's see so provisions of 36 in the second quarter.

Compare it in the third quarter compared to 38 in the third quarter last year.

Higher revenue from both the portfolio and gain on sale was partially offset by higher interest expense, resulting from the recent green bond issuances.

Note that for the quarter in accordance with Cecil we increased our allowance on receivables by $2 million, primarily as a result of additional loan commitments made during the period, which resulted in core earnings per share of 33.

About half the level of the S&P U S high yield energy index.

With this attractive capital markets backdrop, we highlight are very successful recent dead issuances on slide nine.

In August we issued 375 million of tenure unsecured corporate green bonds at $3, 75% coupon.

And $144 million of three year convertible green bonds at a zero percent coupon.

Finally, as we continue to reduce our cost of capital we utilize a small portion of our cash to voluntarily prepay hi Ray depth.

As we turned to slide 11, our portfolio of high quality assets have continued to perform within our expectations. Despite the ongoing recession.

This performance has driven in part by the credit quality of our Counterparties and the structure of our investments.

All of our government and the vast majority of our commercial <unk> enjoyed investment grade ratings.

Volume it will be in sort of that good two to 300 range of of originations.

That that's.

Right.

To the second part of the question are we worried of course, we're always worried but the portfolio has held up well.

And again as we always talk about the portfolios constructed in a way whereby the counterparty.

Typically is incentive to continue making payments, particularly.

Particularly I think part of your question was alluding to receive solar.

And that is also in the queue for call and that is also when we have as a matter of practice.

Reconsider the dividend level as well.

So.

That's the quarter to look at.

Without committing to any actual action.

Okay, Thanks, and what kind of go else could you expect over the next few years.

Actually coming from energy efficiency information, sorry government facilities.

Mm good question, you're presuming a biden.

Presidency, and a Republican Senate, we don't expect any sweeping federal energy legislation.

But back during the Obama Buyten uhm years the.

The federal efficiency market really boom to record level, some of which were still seeing.

Through the Trump administration do executive orders the executive order process is very meaningful to the.

Energy management groups and they take them seriously the lack of.

We.

Leadership on a white house on this issues.

If it were to persist with <unk>.

Limit that market, but.

Assuming biden does win the presidency, you can expect he would be a strong supporter of expanding the aspca UFC and.

Other.

Federal market so.

We're we're promise it looks promising and it'll just reinforce that.

These programs have been.

Enjoying since they were first put in place during the Reagan administration bipartisan support.

Nobody doesn't like saving the government money, creating jobs in all 50 states and improving conditions for for the Warfighter. So we generally get support on both sides of the aisle.

Tax credits start to expire so.

So to me, it's not surprising that.

Our pipeline remains strong.

Got it all back in queue. Thanks for taking the question guys.

Thank you Chris Thanks.

There are no more questions in the queue. This concludes our question and answer session.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

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