Q2 2026 HA Sustainable Infrastructure Capital Inc Earnings Call Transcript
Key Points
- Adjusted EPS grew 25% year-over-year to $0.75 in Q2 2026, with adjusted ROE exceeding 15% for the second consecutive quarter.
- New investments surpassed $1 billion in Q2 and $1.7 billion year-to-date, driven by robust demand for power infrastructure and clean energy.
- The company raised its 2028 adjusted EPS guidance to $3.55-$3.65, reflecting confidence in growth from investment activity, fee income, and portfolio yield.
- Cost of capital improved significantly, with debt spreads narrowing by over 140 basis points since 2021 and effective hedging reducing the June bond issuance cost by 70 basis points.
- Managed assets grew 20% year-over-year to $17.6 billion, supported by a diversified portfolio across 9 asset classes with an average annual loss rate of less than 10 basis points.
- The company maintained capital efficiency with zero ATM issuance in 2026, and strengthened liquidity to $2.2 billion by upsizing its revolver to $2.25 billion and extending maturities.
- The company faces potential risks from rising long-term interest rates, though it has historically managed to offset these with higher investment returns.
- There is uncertainty around the timing and capacity of the CCH1 co-investment vehicle, which is expected to reach capacity by early 2027, and the seamless transition to CCH2 is not yet guaranteed.
- The pipeline, while strong at over $6.5 billion, is subject to potential project delays, which the company acknowledges are common in energy projects.
- The company noted an RNG asset that experienced construction challenges, moving to category 2 in asset quality, though it expects to recover its full investment.
- The guidance for adjusted ROE of greater than 17% in 2028 was affirmed but not raised, indicating some uncertainty in equity components that could limit upside.
- The company's growth is dependent on the pace of client project development, which is an external factor that could limit investment volumes.
Greetings and welcome to the second-quarter 2026 earnings conference call and webcast. (Operator Instructions) As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Aaron Chu, Senior Vice President of Investor Relations.
Thank you, operator, and good afternoon to everyone joining us today for HAE's second quarter 2026 conference call. Earlier this afternoon, Hasse distributed a press release reporting our second quarter 2026 results, a copy of which is available on our website along with the slide presentation we will be referring to today. This conference call is being webcast live on the investor relations page of our website, where a replay will be available later today. Some of the comments made in this call are forward-looking statements which are subject to risks and uncertainties described in the risk sectors section section of the company's Form 10K and other filings with the SEC. A results may differ materially from
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