Hannon Armstrong selling $135 million five-year convertibles to yield 3.625%-4.125%, up 20%-25%

By Stephanie N. Rotondo

Seattle, Aug. 15 – Hannon Armstrong Sustainable Infrastructure Capital Inc. intends to price a $135 million offering of five-year convertible senior notes, the company said in a prospectus filed with the Securities and Exchange Commission on Tuesday.

Price talk is for a 3.625% to 4.125% yield and an initial conversion premium of 20% to 25%, a market source reported.

Deutsche Bank Securities Inc., BofA Merrill Lynch and J.P. Morgan Securities LLC are the joint bookruners. Nomura Securities and Oppenheimer & Co. are the co-managers.

There is a $15 million over-allotment option.

Conversions will be settled in common stock. The notes are convertible at any time.

The convertibles become redeemable on or after March 1, 2022 at par plus accrued interest and a make-whole premium.

Holders can put the paper upon a fundamental change.

The Annapolis, Md.-based real estate investment trust will contribute proceeds to its operating partnership, which will then use the funds to repay outstanding borrowings under one or both of the company’s credit facilities, or for general corporate purposes.

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