{
  "docId": "019dd923-622c-750b-8b97-413873d1229f",
  "docSlug": "211b9918509c",
  "documentTitle": "Hannon Armstrong Sustainable Infrastructure Capital (HASI)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson Block",
  "documentKindSlug": "research-note",
  "documentKindLabel": "Research note",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2022-08-25 00:00:00",
  "orientation": "portrait",
  "aspectRatio": 0.77272725,
  "pageNumber": 11,
  "pageCount": 12,
  "prevPage": 10,
  "nextPage": 12,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "overcrowded",
  "nDataPoints": 4,
  "notes": "The slide is a transcript of an interview with a former HASI executive, focusing on financial engineering and potential accounting/valuation concerns.",
  "elementsJson": [
    "paragraph",
    "footnote"
  ],
  "metadataConfidence": 0.95,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b97-413873d1229f/11",
  "deckHref": "/decks/019dd923-622c-750b-8b97-413873d1229f",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b97-413873d1229f.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b97-413873d1229f#slide-11",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "Because by doing this preferred equity arrangement you’re taking as much cash off the table as you can, while still saying you still own the assets long term.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd952-ee3c-76df-9644-f9dbd67deb19",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.15,
        "w": 0.7,
        "x": 0.15,
        "y": 0.52
      },
      "kind": "paragraph",
      "text": "The reason you care about this, if you're at Vivint, is if you were publicly traded... you were disposing of assets at less than the value that you want the Street to believe they're worth... Because by doing this preferred equity arrangement you're taking as much cash off the table as you can, while still saying you still own the assets long term.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "4b917227-f318-4058-b112-4e0ecf18f709",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.03,
        "w": 0.7,
        "x": 0.15,
        "y": 0.09
      },
      "kind": "paragraph",
      "text": "MW: So there are loans to HASI EMIs, and we thought Vivint was about $140 million of that.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "9db4c7f1-ca1c-4201-a62b-02863492e3ab",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.04,
        "w": 0.7,
        "x": 0.15,
        "y": 0.41
      },
      "kind": "paragraph",
      "text": "If you're at Sunrun or at Vivint, what you want to do is you want to swap out your equity with someone else's equity, right? Bottom line. And what you're doing is you have two options.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "c866a748-f102-48e1-aef8-0871acb0161e",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.06,
        "w": 0.7,
        "x": 0.15,
        "y": 0.22
      },
      "kind": "paragraph",
      "text": "We also discussed the Vivint 3 loans and distributions with a former HASI executive. The executive provided their views on the transaction and Vivint's likely intent to find a way to monetize the asset without impairing its inflated valuation.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "cc92e660-c355-4fb7-9bf8-862b8856a8b9",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.05,
        "w": 0.7,
        "x": 0.15,
        "y": 0.14
      },
      "kind": "paragraph",
      "text": "HASI Accounting Team Member: I see the $776 million of mezzanine loans to residential solar companies [in 2021]. I don't really know what the exact breakdown is between what's SunPower, what's Sunrun and what's Vivint.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "ed968615-a61b-41c7-8cf2-00b3058f74a4",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.7,
        "x": 0.15,
        "y": 0.31
      },
      "kind": "paragraph",
      "text": "So, somebody, and it may be Hannon, which owns a non-controlling interest as well, put in $141 million. And Vivint took $340 million back. ... If you look at page 19 of the PDF of the 10-K/A, you see the debt went up from $135 to $361 million.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "ff33ec42-1945-4971-8e9e-7d4af7f78fb0",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "“So, somebody, and it may be Hannon, which owns a non-controlling interest as well, put in $141 million. And Vivint took $340 million back. There must have been a lot of cash, either that or they borrowed more debt.” — Former HASI Executive A",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd952-ee3c-76df-9644-ffa26b4ce98e",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.4,
        "x": 0.15,
        "y": 0.91
      },
      "kind": "source-note",
      "text": "25 Interview with Former HASI Executive A, April 2022",
      "attrs": {
        "numbered": true
      },
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "f9543c5a-5136-440b-a731-06efc747bf03",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "eed6e335-dc0e-48f6-8fcd-0245ef0b981f",
      "evidence": "The text describes a mechanism for inflating valuations and extracting cash while maintaining the appearance of asset ownership.",
      "confidence": 0.85
    }
  ],
  "arcBeats": [
    {
      "to": 11,
      "from": 9,
      "beatId": "13101c9e-06bf-4846-91fd-8a3174024a4f",
      "arcName": "Overcoming the Monster",
      "arcSlug": "overcoming-monster",
      "beatName": "Exposing Contradictions",
      "beatSlug": null,
      "evidence": "Detailed financial contradictions and executive insights",
      "position": 2,
      "confidence": 0.8,
      "parentBeatName": null,
      "parentBeatSlug": null
    }
  ],
  "loops": [],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}