Hannon Armstrong Sustainable Infrastructure Capital Inc. (HASI), a Maryland-based investment company, has acquired a $107 million portfolio of land and payments from land leases underlying wind and solar projects.
The projects are developed or owned by a slew of companies, including Southern Co., NRG Yield, First Solar and NextEra, and have long-term power purchase agreements from utilities such as San Diego Gas and Electric, Pacific Gas and Electric, the Los Angeles Department of Water and Power, and Southern California Edison.
HASI acquired more than 7,500 acres of land leased to three solar projects with a value of approximately $60 million and the payments from 11 additional land leases for a diversified portfolio of wind projects with a value of approximately $27 million. In addition, the company bought another portfolio of 46 smaller streams of payments from land leases on wind projects.
HASI says the transaction is structured as a purchase of American Wind Capital Co. LLC with no debt, liabilities or employees. Existing employees and management will form a new company named AWCC Capital LLC to originate additional transactions in which HASI has a right of first refusal to purchase additional transactions.
‘We have acquired high-credit-quality, long-duration lease streams that are senior to the project debt in some of the largest solar and wind projects in the country,’ says HASI CEO Jeffrey Eckel. ‘This portfolio diversifies our asset mix while moving us toward our 2014 financial targets and adds another platform for originating new assets that fit well with our [real estate investment trust (REIT)] structure.’
HASI intends to elect and qualify to be taxed as a REIT for federal income tax purposes, commencing with its taxable year ended Dec. 31, 2013. The company also entered into an expansion of its existing credit facility, which provides for an additional $200 million of capacity and increased flexibility in terms.