HASI

• Core Investment Performance & Market Context

  • The company recorded over $1 billion in new investments in Q2 2026, bringing year-to-date new investments to over $1.7 billion, putting the firm on track to hit its 2026 full-year target of $2 to $3 billion in new balance sheet or CCH1 transactions.
  • Management noted strong underlying macro demand for clean energy power infrastructure: solar and wind remain the lowest-cost unsubsidized generation sources, and the U.S. Energy Information Administration projects renewables will make up over 75% of all new U.S. generation capacity added over the next decade, with demand remaining strong even after the sunset of the Investment Tax Credit (ITC).
  • As of May 2026, solar generation surpassed coal generation for the first time ever in the U.S., marking a permanent structural shift in the grid.

• Strategic & Capital Platform Milestones

  • HACI completed full funding of its $1.2 billion investment in the SunZia wind transmission project, the largest clean energy infrastructure project in the Western Hemisphere, which has already set a new peak wind generation record for California's CAISO grid.
  • The company's multi-source funding platform, including the CCH1 co-investment vehicle, investment-grade bond market access, junior subordinated debt market access, and a $2.25 billion upsized revolving credit facility-backed commercial paper program, enables the firm to execute larger transactions and reduce its cost of capital.
  • Debt spreads have improved by more than 140 basis points since 2021, allowing the firm to maintain and expand margins even as base interest rates rose 300 basis points over the same period. A June 2026 bond issuance had an effective cost of 5.6%, 70 basis points lower than the impact of rising base rates would have produced without active hedging.
  • The firm extended debt maturities: no senior notes mature until 2030, the revolving credit facility maturity was extended to 2031, and an unsecured $400 million term loan was extended to 2029, with reduced spreads on both facilities. Total liquidity at quarter end was $2.2 billion.
  • There has been no at-the-market (ATM) equity issuance year-to-date, with minimal expected ATM issuance for full-year 2026, supporting strong capital efficiency.

• Portfolio Diversification

  • The investment pipeline remains above $6.5 billion even after Q2 2026 investment closing, supported by tailwinds including battery adoption growth and renewable natural gas development.
  • The firm is expanding into new complementary asset classes that share core attributes of existing investments: contracted cash flows, high-quality off-takers, proven technology, and positive environmental impact. The firm closed its first water infrastructure investment (a contracted wastewater treatment plant) and is evaluating opportunities in sustainable agriculture for future growth.
  • The portfolio is diversified across 9 asset classes, with an average annual loss rate below 10 basis points, demonstrating strong asset quality and risk management.

• Full-year 2026 guidance for $2 to $3 billion in new balance sheet or CCH1 transactions is maintained, and the firm remains on track to hit this target.
  • Long-term 2028 adjusted earnings per share (EPS) guidance has been revised upward to a range of 355 to 365, from the prior range of 350 to 360, based on stronger-than-expected volumes, margin expansion, improved capital efficiency, and greater visibility on the growth trajectory.
  • The long-term 2028 adjusted return on equity (ROE) guidance of greater than 17% is maintained. Management notes there is potential upside to ROE, but retains the existing guidance due to uncertainty around future equity levels.

HACI does not break out performance for distinct product segments in this call. Overall firm performance: Adjusted Q2 2026 earnings per share was 75 cents, up 25% year over year. For the first half of 2026, adjusted recurring net investment income grew 27% year over year to $208 million, adjusted EPS totaled $1.52 per share, and adjusted earnings increased 31% year over year to $200 million. Adjusted return on equity (ROE) exceeded 15% for the second consecutive quarter, up from 12.3% in the first half of 2025. As of quarter end, total managed assets were $17.6 billion, up 20% year over year; the on-balance sheet portfolio was $8.2 billion, up 14% year over year, and assets held in the CCH1 co-investment vehicle reached $2.9 billion. In the first half of 2026, closed total transactions were $1.7 billion, with $1.4 billion held on balance sheet or at CCH1; gain on sale revenue hit $39 million, and origination fees and other income reached $17 million. The transportation segment has accumulated $325 million in cumulative investments to date.

• Energy infrastructure projects occasionally experience individual delays, but management notes no systemic or industry-wide project delays that have impacted the firm's pipeline to date.
  • One renewable natural gas (RNG) asset experienced construction challenges; the firm has taken control of the project to oversee completion and intends to sell it, with management believing full investment recovery is reasonably likely.
  • Rising long-term interest rates present a potential risk to margins, but management notes the firm has consistently offset rate increases with higher investment returns and improved debt spreads, maintaining profitability across all interest rate environments since 2021, and remains confident in its risk management capabilities if rates rise further.
  • Forward-looking statements are inherently subject to risks and uncertainties that could cause actual results to differ materially from guidance, as disclosed in the firm's SEC filings.

Q: There is widespread market concern about systemic project delays, particularly related to large projects and data center demand in Texas. Have you seen any thematic slowdown in project development pace in your pipeline? / A: HACI has not seen any systemic, industry-wide project delays across its portfolio of partner projects. While minor individual delays are normal for energy infrastructure projects, there are no thematic delays that are impacting the overall pipeline. Some projects move faster than others, but there is no material slowdown across the firm's pipeline.

Q: When will CCH1 hit capacity, and what is the timeline and plan for the follow-on CCH2 vehicle? Are you prepared if the transition is delayed? / A: CCH1 is most likely to hit capacity in early 2027. HACI is making good progress on launching CCH2 for a seamless transition when CCH1 reaches capacity. If CCH2 is delayed for any reason, the firm can either upsize CCH1 with partner KKR or fund additional investments on HACI's own balance sheet, supported by the firm's current strong liquidity position.

Q: Can you share details on your first water infrastructure investment, and is this a repeatable opportunity? / A: The first water investment is a contracted wastewater treatment plant, which is a low-risk asset aligned with HACI's investment strategy, as water demand is non-cyclical. The firm is working with the project sponsor to release additional public details in the coming weeks, and the company expects more repeatable opportunities in the water infrastructure sector going forward.

Q: What are the main limiting factors for future annual investment growth, given strong demand and available capital? What is the outlook for long-term ROE upside after the EPS guidance raise? / A: The only meaningful limiting factor is the pace at which HACI's clients choose to develop and build projects, as the firm has sufficient capital and internal resources to support faster growth if client demand requires it. Management maintains the 2028 ROE guidance of greater than 17%: while there is potential upside from current strong yields and capital efficiency, there is too much uncertainty around future equity levels to change the existing guidance at this time.