SEC Comment Letter for HA Sustainable Infrastructure Capital, Inc. (HASI) (CIK 0001561894) (HASI) — Jan 16, 2013
HA Sustainable Infrastructure Capital, Inc. (HASI) (CIK 0001561894)
Date: Jan. 16, 2013 · CIK: 0001561894 · Accession: 0000000000-13-002696
AI Filing Summary & Sentiment
Referenced dates: December 6, 2012
Letter
January 15, 2013 Steven Chuslo, Esq. Senior Vice President and General Counsel Hannon Armstrong Sustainable Infrastructure Capital, Inc. 1906 Towne Centre Blvd. Annapolis, MD 21401
Re: Hannon Armstrong Sustainable Infrastructure Capital, Inc . Amendment No. 1 to Confidential Draft Registration Statement on Form S -11 Submitted December 27, 2012 CIK No. 0001561894
Dear Mr. Chuslo :
We have reviewed your confidential draft registration statement and have the following comments. In some of our comments, w e may ask you to provide us with information so we may better understand your disclosure.
Please respond to this letter by providing the requested information and either submitting an amended confidential draft registration statement or publicly filing y our registration statement on EDGAR. If you do not believe our comments apply to your facts and circumstances or do not believe an amendment is appropriate, please tell us why in your response.
After reviewing the information you provide in response to these comments and your amended confidential draft registration statement or filed registration statement, we may have additional comments .
Overview, page 1
1. We note your response to comment 8 from our letter dated December 6, 2012 and note that you have revised the italicized introductory paragraph. Please also revise the first paragraph of the Overview section to provide a brief description of your corporate history, including the date and state of incorporation.
Our Assets, page 6
2. We note the bl anks in this section, to be filled in before the preliminary prospectus is distributed to potential investors. Please tell us whether any one project represents a significant portion of your total managed assets.
Steven Chuslo, Esq. Hannon Armstrong Sustainable Infrastructure Capital, Inc. January 15, 2013 Page 2
3. We note your response to comment 10 from our letter dated December 6, 2012 regarding the investment grade obligor, which is the primary credit obligor on one of your projects. Please tell us the percentage of total managed assets represented by this one project, as well as which asset class it f alls into.
Dilution, page 58
4. We note your response to prior comment 14. We are unable to agree with your presentation. Please revise your dilution table to start with historical net tangible book value per share and show the increase to net tangible bo ok value that resulted from the formation transaction separately from the increase attributable to the offering.
Management’s Discussion and Analysis of Financial Condition and Results of Operations, page 62
5. We note your response to comment 1 6 from our l etter dated December 6, 2012 , as well as your revised disclosure in the fourth paragraph on page 63. Please provide a further breakdown of the debt to equity financing ratios for clean energy projects and sustainable infrastructure projects. Also, please revise the penultimate sentence of this paragraph to provide approximate percentages, rather than using the terms “vast majority” and “significant portion.”
Existing Credit Facility, page 80
6. We note your response to comment 21 from our letter dated December 6, 2012 , as well as the related revised disclosure on page 80. Please disclose actual ratio calculations to the extent your compliance with a ratio is likely to have a material impact on the company , either by restricting additional indebtedness or triggering default .
Contractual Obligations and Commitments, page 81
7. We note your response to prior comment 22 and your revisions to your filing. Please also disclose the amount of interest related to your debt. Please refer to footnote 46 in our Re lease 33 -8350.
Distribution of HA Energy Source Holdings, LLC to our current owners, page 130
8. We note your added disclosure at the bottom of page 130. Please revise to provide the material terms of the distribution, including the value to be received by existing owners (both the distribution amount and the dividend amount). We note related disclosure on page 81. Please also disclose the distribution and dividend to be received by the existing owners in the summary section.
Steven Chuslo, Esq. Hannon Armstrong Sustainable Infrastructure Capital, Inc. January 15, 2013 Page 3
Financial Statements
9. We note your response to prior comment 32. Please write to the Division of Corporation Finance’s Office of Chief Accountant to request a waiver from providing Rule 3 -09 financial statements for HA EnergySource Holdings LLC.
Financial Statements of Hannon Ar mstrong Capital, LLC for the year ended September 30, 2012
10. We note your response to prior comment 38 and your revisions to your filing. Please tell us where you have provide d the disclosure requirements of Items II, VI and VII of Guide 3.
Consolidated Statements of Operations, page F -11
11. We note your response to prior comment 39. We are unable to agree with your use of the caption ‘net investment income.’ Please revise to remove this caption and subtotal.
Notes to Consolidated Financial Statements, page F -15
2. Summary of Significan t Accounting Policies, page F -15
Securiti zation of Receivables, page F -16
12. We note your response to prior comment 41 and your revisions to your filing. Please further clarify how you will account for credit losses and other losses when you do not intend to sell the debt security and you determined that the decline is other than temporary.
Equity Method Investment in Affiliate, page F -18
13. Please tell us how you accounted for the consolidation of HA EnergySource during August 2012. Please refer to ASC 805.
9. Intangib le Assets and Goodwill, page F -28
14. We note your response to prior comment 43. Please tell us how you determined that the value of a contractual commitment to be paid as advisory fees is an intangible asset. Within your response, please reference the authoritative accounting literature management relied upon.
Steven Chuslo, Esq. Hannon Armstrong Sustainable Infrastructure Capital, Inc. January 15, 2013 Page 4
Exhibits
Draft Tax Opinion
15. In the paragraph that begins, “In our examination of the foregoing documents…,” please exp lain to us why assumption (iv) is appropriate.
16. In assumption (iii) of the same paragraph and in the first line of the paragraph that begins, “For purposes of rendering the opinions stated below…,” please limit the statement about the accuracy of the representations contained in the Certificate of Representations to factual matters only.
General
If you intend to respond to these comments with an amended draft registration statement , please submit it and any associated correspondence in accordance wit h the guidance we provide in the Division’s October 11, 2012 announcement on the SEC website at http://www.sec.gov/divisions/corpfin/cfannouncements/drsfilingprocedures101512.htm .
You may contact Jennifer Monick, Staff Accountant, at (202) 551 -3295 or Kev in Woody, Accounting Branch Chief, at (202) 551 -3629 if you have questions regarding comments on the financial statements and related matters. With respect to questions relating to our comment regarding the Investment Company Act, please contact Rochelle Plesset in the Division of Investment Management at (202) 551 -6840. Please contact Angela McHale , at (202) 551 -3402 or me at (202) 551 -3655 with any other questions .
Sincerely,
/s/ Sonia Barros
Show Raw Text
January 15, 2013
Steven Chuslo, Esq.
Senior Vice President and General Counsel
Hannon Armstrong Sustainable Infrastructure Capital, Inc.
1906 Towne Centre Blvd.
Annapolis, MD 21401
Re: Hannon Armstrong Sustainable Infrastructure Capital, Inc .
Amendment No. 1 to
Confidential Draft Registration Statement on Form S -11
Submitted December 27, 2012
CIK No. 0001561894
Dear Mr. Chuslo :
We have reviewed your confidential draft registration statement and have the
following comments. In some of our comments, w e may ask you to provide us with
information so we may better understand your disclosure.
Please respond to this letter by providing the requested information and either
submitting an amended confidential draft registration statement or publicly filing y our
registration statement on EDGAR. If you do not believe our comments apply to your
facts and circumstances or do not believe an amendment is appropriate, please tell us why
in your response.
After reviewing the information you provide in response to these comments and
your amended confidential draft registration statement or filed registration statement, we
may have additional comments .
Overview, page 1
1. We note your response to comment 8 from our letter dated December 6, 2012 and
note that you have revised the italicized introductory paragraph. Please also
revise the first paragraph of the Overview section to provide a brief description of
your corporate history, including the date and state of incorporation.
Our Assets, page 6
2. We note the bl anks in this section, to be filled in before the preliminary
prospectus is distributed to potential investors. Please tell us whether any one
project represents a significant portion of your total managed assets.
Steven Chuslo, Esq.
Hannon Armstrong Sustainable Infrastructure Capital, Inc.
January 15, 2013
Page 2
3. We note your response to comment 10 from our letter dated December 6, 2012
regarding the investment grade obligor, which is the primary credit obligor on one
of your projects. Please tell us the percentage of total managed assets represented
by this one project, as well as which asset class it f alls into.
Dilution, page 58
4. We note your response to prior comment 14. We are unable to agree with your
presentation. Please revise your dilution table to start with historical net tangible
book value per share and show the increase to net tangible bo ok value that
resulted from the formation transaction separately from the increase attributable to
the offering.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations, page 62
5. We note your response to comment 1 6 from our l etter dated December 6, 2012 , as
well as your revised disclosure in the fourth paragraph on page 63. Please
provide a further breakdown of the debt to equity financing ratios for clean energy
projects and sustainable infrastructure projects. Also, please revise the
penultimate sentence of this paragraph to provide approximate percentages, rather
than using the terms “vast majority” and “significant portion.”
Existing Credit Facility, page 80
6. We note your response to comment 21 from our letter dated December 6, 2012 , as
well as the related revised disclosure on page 80. Please disclose actual ratio
calculations to the extent your compliance with a ratio is likely to have a material
impact on the company , either by restricting additional indebtedness or triggering
default .
Contractual Obligations and Commitments, page 81
7. We note your response to prior comment 22 and your revisions to your filing.
Please also disclose the amount of interest related to your debt. Please refer to
footnote 46 in our Re lease 33 -8350.
Distribution of HA Energy Source Holdings, LLC to our current owners, page 130
8. We note your added disclosure at the bottom of page 130. Please revise to
provide the material terms of the distribution, including the value to be received
by existing owners (both the distribution amount and the dividend amount). We
note related disclosure on page 81. Please also disclose the distribution and
dividend to be received by the existing owners in the summary section.
Steven Chuslo, Esq.
Hannon Armstrong Sustainable Infrastructure Capital, Inc.
January 15, 2013
Page 3
Financial Statements
9. We note your response to prior comment 32. Please write to the Division of
Corporation Finance’s Office of Chief Accountant to request a waiver from
providing Rule 3 -09 financial statements for HA EnergySource Holdings LLC.
Financial Statements of Hannon Ar mstrong Capital, LLC for the year ended September
30, 2012
10. We note your response to prior comment 38 and your revisions to your filing.
Please tell us where you have provide d the disclosure requirements of Items II, VI
and VII of Guide 3.
Consolidated Statements of Operations, page F -11
11. We note your response to prior comment 39. We are unable to agree with your
use of the caption ‘net investment income.’ Please revise to remove this caption
and subtotal.
Notes to Consolidated Financial Statements, page F -15
2. Summary of Significan t Accounting Policies, page F -15
Securiti zation of Receivables, page F -16
12. We note your response to prior comment 41 and your revisions to your filing.
Please further clarify how you will account for credit losses and other losses when
you do not intend to sell the debt security and you determined that the decline is
other than temporary.
Equity Method Investment in Affiliate, page F -18
13. Please tell us how you accounted for the consolidation of HA EnergySource
during August 2012. Please refer to ASC 805.
9. Intangib le Assets and Goodwill, page F -28
14. We note your response to prior comment 43. Please tell us how you determined
that the value of a contractual commitment to be paid as advisory fees is an
intangible asset. Within your response, please reference the authoritative
accounting literature management relied upon.
Steven Chuslo, Esq.
Hannon Armstrong Sustainable Infrastructure Capital, Inc.
January 15, 2013
Page 4
Exhibits
Draft Tax Opinion
15. In the paragraph that begins, “In our examination of the foregoing documents…,”
please exp lain to us why assumption (iv) is appropriate.
16. In assumption (iii) of the same paragraph and in the first line of the paragraph that
begins, “For purposes of rendering the opinions stated below…,” please limit the
statement about the accuracy of the representations contained in the Certificate of
Representations to factual matters only.
General
If you intend to respond to these comments with an amended draft registration
statement , please submit it and any associated correspondence in accordance wit h the
guidance we provide in the Division’s October 11, 2012 announcement on the SEC
website at
http://www.sec.gov/divisions/corpfin/cfannouncements/drsfilingprocedures101512.htm .
You may contact Jennifer Monick, Staff Accountant, at (202) 551 -3295 or Kev in
Woody, Accounting Branch Chief, at (202) 551 -3629 if you have questions regarding
comments on the financial statements and related matters. With respect to questions
relating to our comment regarding the Investment Company Act, please contact Rochelle
Plesset in the Division of Investment Management at (202) 551 -6840. Please contact
Angela McHale , at (202) 551 -3402 or me at (202) 551 -3655 with any other questions .
Sincerely,
/s/ Sonia Barros
Sonia Barros
Special Counsel