Bloomberg News

Energy Financier Hannon Armstrong Seeks $250 Million in IPO

April 04, 2013

Hannon Armstrong Sustainable Infrastructure Capital Inc., which filed plans Feb. 15 for an initial public offering, more than doubled the amount its seeking to raise from investors.

The finance company, based in Annapolis, Maryland, increased the “proposed maximum aggregate offering price” to $250 million from $100 million, according to a filing today. It plans to offer 13.3 million shares for $14 to $16 apiece, and its common stock has been approved for listing on the New York Stock Exchange under the symbol HASI. Underwriters will have the option to purchase nearly 2 million additional shares.

The deal would be the biggest for a U.S. business focused on renewable energy and energy efficiency since 2010, according to Bloomberg New Energy Finance analyst Stefan Linder.

“This would be the largest U.S. clean energy IPO in three years,” Linder said by e-mail.

The company plans to qualify as a real estate investment trust, or REIT. It’s an entity created in November for that purpose by Hannon Armstrong Capital LLC, which is the largest financier of energy efficiency projects for the U.S. federal government, according to the filing.

The company may become the first in the industry to tap into the REIT structure, which may provide a cheaper source of capital for projects in need of funding, he said.

“Hannon Armstrong is aiming to pass through income from renewable energy and energy efficiency loans to shareholders,” Linder said. “They’re the first company we know of to get the stamp of approval from the IRS,” he said.

The unit pursuing the IPO would provide debt and equity financing for projects that “increase energy efficiency, provide cleaner energy sources, positively impact the environment or make more efficient use of natural resources,” it said. Hannon Armstrong Capital would become part of that unit following the IPO.

Bank of America Corp (BAC:US)., UBS AG (UBSN) and Wells Fargo & Co. (WFC:US) are managing the offering.

To contact the reporter on this story: Andrew Herndon in San Francisco at aherndon2@bloomberg.net

To contact the editor responsible for this story: Reed Landberg at landberg@bloomberg.net


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