Climate-change solutions investor Hannon Armstrong announced today the closing of a $400 million senior unsecured sustainability-linked revolving credit facility. The facility links the interest paid by the company to its performance on certain climate-related goals.
Sustainability linked loans and securities are an emerging form of sustainable finance instruments, with attributes including interest payments tied to an issuer’s achievement of specific sustainability targets. The instruments have been gaining significant popularity by issuers and investors. For Hannon Armstrong’s new facility, the company will benefit from interest rate reductions if the Company achieves certain levels of its CarbonCount metric on a quarterly basis. CarbonCount, developed by Hannon Armstrong in 2013, is a proprietary scoring tool for evaluating investments in U.S.-based renewable energy, energy efficiency, and climate resilience projects to determine the efficiency by which each dollar of invested capital reduces annual carbon dioxide equivalent (CO2e) emissions.
JPMorgan Chase Bank acted as administrative agent, sole bookrunner, sole lead arranger, and sustainability structuring agent on the deal, with other participants including Bank of America, Barclays Bank, Credit Suisse, KeyBank, Morgan Stanley, Royal Bank of Canada, Sumitomo Mitsui Banking Corporation, Wells Fargo, and Goldman Sachs.
Jeffrey A. Lipson, Chief Financial Officer and Chief Operating Officer, said:
“We are very pleased and appreciative that our relationship banks continue to support us, and we welcome their participation in our sustainability-linked unsecured revolving credit facility. In addition to further enhancing our liquidity and the flexibility of our funding platform to support growth, the facility provides market validation of our CarbonCount scoring tool.”