Hannon Armstrong Sustainable Infrastructure Capital, Inc.

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On July 12, 2022, Muddy Waters Research issued a short report alleging that Hannon Armstrong Sustainable Infrastructure Capital’s “accounting is so complex and misleading that its financial statements are effectively meaningless.”

According to the report, “HASI misleadingly inflates GAAP earnings three ways: 1) Through a loophole in the arcana of accounting for renewables subsidies, HASI books non-cash unrealizable income relating to third parties’ tax credits that will be reversed; 2) HASI produces non-cash income by manipulating the discount rate it applies to residual assets to implausibly low levels, thereby inflating its gains on securitizations; and, 3) HASI books interest income from non-cash “Paid in Kind” (“PIK”) interest payments, which are essentially IOUs from stressed borrowers.”

Shares of Hannon Armstrong Sustainable Infrastructure Capital, Inc. stock dropped more than 16% in intraday trading on July 12, 2022.

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