HA Sustainable Infrastructure Capital, Inc.HASI
HA Sustainable Infrastructure Capital, Inc. Fair Value Disclosure
Fair Value Measurements
Fair value is defined as the price that would be received for an asset or paid to transfer a liability in an orderly transaction between market participants on the measurement date. The fair value accounting guidance provides a three-level hierarchy for classifying financial instruments. The levels of inputs used to determine the fair value of our financial assets and liabilities carried on the balance sheet at fair value and for those which only disclosure of fair value is required are characterized in accordance with the fair value hierarchy established by ASC 820, Fair Value Measurements. Where inputs for a financial asset or liability fall in more than one level in the fair value hierarchy, the financial asset or liability is classified in its entirety based on the lowest level input that is significant to the fair value measurement of that financial asset or liability. We use our judgment and consider factors specific to the financial assets and liabilities in determining the significance of an input to the fair value measurements. As of December 31, 2025 and 2024, our retained interests in securitization trusts, our derivatives, receivables for which we have elected the fair value option, if any, and our debt securities were carried at fair value on the consolidated balance sheets on a recurring basis. The three levels of the fair value hierarchy are described below:
•Level 1—Quoted prices (unadjusted) in active markets that are accessible at the measurement date.
•Level 2—Observable prices that are based on inputs not quoted on active markets but corroborated by market data.
•Level 3—Unobservable inputs are used when little or no market data is available.
The tables below state the estimated fair value of our financial instruments on our balance sheet. Unless otherwise discussed below, fair values for our Level 2 and Level 3 measurements are measured using a discounted cash flow model, the inputs to which consist of base interest rates and spreads over base rates. Spreads are based upon market observation and recent comparable transactions. An increase in these inputs would result in a lower fair value and a decline would result in a higher fair value. Our Senior Notes (as defined below) and Convertible Notes are valued using a market based approach and observable prices. The receivables held-for-sale, if any and excluding those on which we have elected the fair value option, are carried at the lower of cost or fair value, as determined on an individual asset basis.
| As of December 31, 2025 | |||||||||||||||||
| Fair Value | Carrying Value | Level | |||||||||||||||
| (in millions) | |||||||||||||||||
| Assets | |||||||||||||||||
| Receivables | $ | 3,222 | $ | 3,280 | Level 3 | ||||||||||||
Receivables held-for-sale | 128 | 114 | Level 3 | ||||||||||||||
Debt securities (1) | 73 | 73 | Level 3 | ||||||||||||||
Retained interests in securitization trusts (2) | 300 | 300 | Level 3 | ||||||||||||||
| 25 | 25 | Level 2 | |||||||||||||||
Liabilities (3) | |||||||||||||||||
Credit facility | $ | 46 | $ | 46 | Level 3 | ||||||||||||
| Commercial paper notes | 225 | 225 | Level 3 | ||||||||||||||
Term loans payable | 391 | 391 | Level 3 | ||||||||||||||
| Non-recourse debt | 128 | 128 | Level 3 | ||||||||||||||
Senior notes | 3,539 | 3,489 | Level 2 | ||||||||||||||
Junior subordinated notes | 529 | 505 | Level 2 | ||||||||||||||
Convertible Notes | 527 | 408 | Level 2 | ||||||||||||||
| 6 | 6 | Level 2 | |||||||||||||||
(1)The amortized cost of our debt securities as of December 31, 2025, was $43 million.
(2)The amortized cost of our retained interests in securitization trusts net of allowance for credit losses as of December 31, 2025, was $348 million. A 5% adverse change in discount rates would decrease the fair value of these assets by $15 million, and a 10% adverse change would decrease the fair value by $29 million.
(3)Fair value and carrying value exclude unamortized financing costs.
| As of December 31, 2024 | |||||||||||||||||
| Fair Value | Carrying Value | Level | |||||||||||||||
| (in millions) | |||||||||||||||||
| Assets | |||||||||||||||||
| Receivables | $ | 2,700 | $ | 2,896 | Level 3 | ||||||||||||
| Receivables held-for-sale | 79 | 76 | Level 3 | ||||||||||||||
Debt securities (1) | 7 | 7 | Level 3 | ||||||||||||||
Retained interests in securitization trusts (2) | 249 | 249 | Level 3 | ||||||||||||||
| 72 | 72 | Level 2 | |||||||||||||||
Liabilities (3) | |||||||||||||||||
| Credit facilities | $ | 1 | $ | 1 | Level 3 | ||||||||||||
| Commercial paper notes | 100 | 100 | Level 3 | ||||||||||||||
Term loans payable | 415 | 415 | Level 3 | ||||||||||||||
| Non-recourse debt | 132 | 136 | Level 3 | ||||||||||||||
Senior notes | 3,098 | 3,162 | Level 2 | ||||||||||||||
| Convertible notes: | |||||||||||||||||
| 2025 Exchangeable Senior Notes | 214 | 218 | Level 2 | ||||||||||||||
| 2028 Exchangeable Senior Notes | 470 | 408 | Level 2 | ||||||||||||||
| Total Convertible Notes | 684 | 626 | Level 2 | ||||||||||||||
| 3 | 3 | Level 2 | |||||||||||||||
(1)The amortized cost of our debt securities as of December 31, 2024, was $8 million.
(2)The amortized cost of our retained interests in securitization trusts net of allowance for credit losses as of December 31, 2024, was $301 million. A 5% adverse change in discount rates would decrease the fair value of these assets by $12 million, and a 10% adverse change would decrease the fair value by $23 million.
(3)Fair value and carrying value exclude unamortized financing costs.
Debt Securities
The following table reconciles the beginning and ending balances for our Level 3 debt securities that are carried at fair value on a recurring basis:
| For the year ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Balance, beginning of period | $ | 7 | $ | 7 | |||||||
Purchases of debt securities | 68 | 11 | |||||||||
Payments on debt securities | (2) | — | |||||||||
Sale of debt securities | — | (11) | |||||||||
Equity method investee losses applied (1) | (31) | — | |||||||||
Unrealized gains (losses) on debt securities recorded in OCI | 31 | — | |||||||||
| Balance, end of period | $ | 73 | $ | 7 | |||||||
(1) As described in Note 2, losses in excess of basis from equity method investments from which we have other outstanding instruments are allocated against those other instruments.
We had the following debt securities in an unrealized loss position:
| Estimated Fair Value | Unrealized Losses (1) | Count of Assets | |||||||||||||||||||||||||||||||||
| Assets with a loss shorter than 12 months | Assets with a loss longer than 12 months | Assets with a loss shorter than 12 months | Assets with a loss longer than 12 months | Assets with a loss shorter than 12 months | Assets with a loss longer than 12 months | ||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| December 31, 2025 | $ | 62 | $ | 7 | $ | 0.3 | $ | 0.9 | $ | — | 1 | 5 | |||||||||||||||||||||||
| December 31, 2024 | — | 7 | — | 1 | — | 5 | |||||||||||||||||||||||||||||
(1) Loss positions are due to interest rates movements and are not indicative of credit deterioration. We have the intent and ability to hold these assets until a recovery of fair value.
In determining the fair value of our debt securities, we used a market-based risk-free rate and added a range of interest rate spreads based upon transactions involving similar assets of approximately 3% to 6% as of December 31, 2025 and 3% as of December 31, 2024. The weighted average discount rates used to determine the fair value of our debt securities as of December 31, 2025 and December 31, 2024 were 9.7% and 6.7%, respectively.
Retained interests in securitization trusts
The following table reconciles the beginning and ending balances for our Level 3 retained interest in securitization trust assets that are carried at fair value on a recurring basis, with changes in fair value recorded through AOCI:
| For the year ended December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Balance, beginning of period | $ | 249 | $ | 219 | |||||||
Accretion of retained interests in securitization trusts | 19 | 17 | |||||||||
Additions to retained interests in securitization trusts | 49 | 43 | |||||||||
Collections from retained interests in securitization trusts | (21) | (14) | |||||||||
Unrealized gains (losses) on retained interests in securitization trusts recorded in OCI | 4 | (16) | |||||||||
| Balance, end of period | $ | 300 | $ | 249 | |||||||
We had the following retained interests in securitization trusts in an unrealized loss position:
| Estimated Fair Value | Unrealized Losses (1) | Count of Assets | |||||||||||||||||||||||||||||||||
| Assets with a loss shorter than 12 months | Assets with a loss longer than 12 months | Assets with a loss shorter than 12 months | Assets with a loss longer than 12 months | Assets with a loss shorter than 12 months | Assets with a loss longer than 12 months | ||||||||||||||||||||||||||||||
| (in millions) | |||||||||||||||||||||||||||||||||||
| December 31, 2025 | $ | 31 | $ | 188 | $ | 1 | $ | 51 | 8 | 87 | |||||||||||||||||||||||||
| December 31, 2024 | 67 | 152 | 4 | 52 | 28 | 69 | |||||||||||||||||||||||||||||
(1) Other than the assets for which there is a reserve as discussed in Note 5, loss positions are due to interest rates movements and are not indicative of credit deterioration. We have the intent and ability to hold these assets until a recovery of fair value.
In determining the fair value of our retained interests in securitization trusts, as of December 31, 2025 and 2024, we used a market-based risk-free rate and added a range of interest rate spreads of approximately 1% to 5% based upon transactions involving similar assets. The weighted average discount rate used to determine the fair value of our retained interests in securitization trusts as of December 31, 2025 and 2024 were 7.0% and 7.3%, respectively.
Non-recurring Fair Value Measurements
Our financial statements may include non-recurring fair value measurements related to acquisitions and non-monetary transactions. Assets acquired in a business combination, if any, are recorded at their fair value. We may use third party valuation firms to assist us with developing our estimates of fair value.
Concentration of Credit Risk
Our receivables and debt securities are backed by various projects, the U.S. federal government, and investment grade state and local governments and do not, in our view, represent a significant concentration of credit risk given the large number of diverse offtakers and other obligors of the projects. Additionally, certain of our investments are collateralized by projects concentrated in certain geographic regions throughout the United States. These investments typically have structural credit protections to mitigate our risk exposure and, in most cases, the projects are insured for estimated physical loss, which helps to mitigate the possible risk from these concentrations.
We had cash deposits that are subject to credit risk as shown below:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| (in millions) | |||||||||||
| Cash deposits | $ | 110 | $ | 130 | |||||||
| Restricted cash deposits (included in other assets) | 35 | 20 | |||||||||
| Total cash deposits | $ | 145 | $ | 150 | |||||||
| Amount of cash deposits in excess of amounts federally insured | $ | 143 | $ | 148 | |||||||
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 13, 2026 | Showing above |
| 2024 | Feb 14, 2025 | |
| 2023 | Feb 16, 2024 | |
| 2022 | Feb 21, 2023 | |
| 2021 | Feb 22, 2022 | |
| 2020 | Feb 22, 2021 | |
| 2019 | Feb 25, 2020 | |
| 2018 | Feb 22, 2019 | |
| 2017 | Feb 23, 2018 | |
| 2016 | Feb 24, 2017 | |
| 2015 | Mar 1, 2016 | |
About Fair Value Disclosures
Fair value disclosures classify all assets and liabilities measured at fair value into a three-level hierarchy: Level 1 (quoted market prices), Level 2 (observable inputs like yield curves), and Level 3 (unobservable inputs requiring management estimates). The proportion of Level 3 assets directly reflects how much of the balance sheet depends on internal models rather than market evidence.
Key signals: a growing Level 3 balance relative to total fair-value assets increases valuation uncertainty and earnings volatility risk. Watch for transfers between levels — assets moving from Level 2 to Level 3 often signal deteriorating market liquidity. Unrealized gains and losses on Level 3 positions flow through earnings or other comprehensive income, so large swings deserve scrutiny. For financial institutions, examine the sensitivity disclosures that show how Level 3 valuations change under alternative assumptions. Compare the fair value of debt against its carrying amount to gauge hidden leverage.