Fitch rates HAT notes BB+

Fitch Ratings said it assigned a rating of BB+ to the $350 million 5¼% five-year unsecured notes issued jointly by HAT Holdings I LLC and HAT Holdings II LLC, which are indirect subsidiaries of Hannon Armstrong Sustainable Infrastructure Capital.

The proceeds will be used to repay a portion of the debt outstanding under the credit facility to acquire or refinance eligible green projects and for general corporate purposes, Fitch said.

The notes are guaranteed by Hannon Armstrong, the agency said.

The rating on the notes is equalized with Hannon's issuer default rating and existing unsecured debt as the new notes rank equally with the outstanding unsecured convertible notes, Fitch said.

The rating also considers the availability of an unencumbered asset pool, which suggests average recovery prospects for debtholders under a stressed scenario, the agency said.

The ratings reflect its established, albeit niche, market position within the renewable energy financing sector, experienced management team and diversified investment portfolio, Fitch said.

The ratings are constrained by its largely secured wholesale funding profile that results in a high encumbered asset ratio relative to peers, modest scale, dependence on access to the capital markets and limited ability to retain capital due to dividend distribution requirements as a REIT, the agency said.

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