11 unchanged sentences
We first evaluate the credit rating of the obligors involved in the project using an average of the external credit ratings for an obligor, if available, or an estimated internal rating based on a third-party credit scoring system.
−Removed: We then estimate the probability of default and estimated recovery rate based on the obligors’ credit ratings and the terms of the contract.
+Added: We then estimate the probability of default and estimated recovery rate based on the
+Added: obligors’ credit ratings and the terms of the contract.
We also review the performance of each investment, including through, as appropriate, a review of project performance, monthly payment activity and active compliance monitoring, regular communications with project management and, as applicable, its obligors, sponsors and owners, monitoring the financial performance of the collateral, periodic property visits and monitoring cash management and reserve accounts.
16 unchanged sentences
See Note 3 to our financial statements in this Form 10-Q for the estimated fair value of our fixed rate long-term debt, which is based on having the same debt service requirements that could have been borrowed at the date presented, at prevailing current market interest rates.
−Removed: We have $454 million of debt with variable interest rates outstanding as of September 30, 2023, including the unhedged portion of loans under our term loan facility, revolving credit facilities and borrowings under our commercial paper program.
+Added: We have $4.1 billion of debt with fixed rates, which includes $820 million of floating rate borrowings we have hedged using interest rate derivatives pursuant to strategies described above.
+Added: We have $139 million of debt with variable interest rates outstanding as of March 31, 2024, including the unhedged portion of loans under our term loan facility, revolving credit facilities and borrowings under our commercial paper program.
Future increases in interest rates would result in higher interest expense while future decreases in interest rates would result in lower interest expense.
−Removed: As described above, we may use various financing techniques including interest rate swap agreements, interest rate cap agreements or other financial instruments, or a combination of these strategies to mitigate the variable interest nature of these facilities.
A 50 basis point increase in benchmark interest rates would increase the quarterly interest expense related to the $139 million in floating-rate borrowings by $174 thousand.
16 unchanged sentences
Projects in which we invest, or in which we may plan to invest, may also be exposed to volatility in the prices of environmental attributes, such as renewable energy credits or other similar credits which the project may produce.
−Removed: Although we generally focus on renewable energy projects that have the majority of their operating cash flow supported by long-term PPAs or leases, many projects have shorter term contracts (which may have the potential of producing higher current returns) or sell their power or environmental attributes in the open market on a merchant basis.
+Added: Although we generally focus on renewable energy projects that have the majority of their operating cash flow supported by long-term PPAs or leases, many of the projects in which we invest have shorter term contracts (which may have the potential of producing higher current returns) or sell their power or environmental attributes in the open market on a merchant basis.
The cash flows of certain projects, and thus the repayment of, or the returns available for, our assets, are subject to risk if energy or environmental attribute prices change.
2 unchanged sentences
When structuring and underwriting these transactions, we evaluate these transactions using a variety of scenarios, including natural gas prices remaining low for an extended period of time.
−Removed: Despite these protections, as natural gas price volatility continues or PPAs expire, the cash flows from certain projects are exposed to these market conditions and we work with the projects sponsors to minimize any impact as part of our on-going active asset management and portfolio monitoring.
+Added: Despite these protections, as natural gas or renewable fuel credit price volatility continues or PPAs expire, the cash flows from certain of the projects in which we have invested are exposed to these market conditions and we work with the projects sponsors to minimize any impact as part of our on-going active asset management and portfolio monitoring.
We often invest in utility scale solar projects by owning the land under the project where our rent is paid out of project operational costs before the debt or equity in the project receives any payments.
1 unchanged sentence
Certain PPAs or related agreements may also price power at a different location than the location where power is delivered to the grid, and the projects may be negatively impacted to the extent to which these prices differ.
−Removed: We believe high prices in natural gas may increase the demand for other projects such as renewable energy that may be a substitute for natural gas, and that low prices in natural gas may increase demand for some types of projects, such as combined heat and power.
+Added: To the extent transmission and distribution infrastructure in geographies in which we invest is not able to accommodate additional power, additional renewable penetration from other new projects in certain geographic areas could decrease the revenues of our projects.
We seek to structure our energy efficiency investments so that we typically avoid exposure to commodity price risk.
10 unchanged sentences
We seek to manage credit risk using thorough due diligence and underwriting processes, strong structural protections in our loan agreements with customers and continual, active asset management and portfolio monitoring.
−Removed: Additionally, we have a Finance and Risk Committee of our board of directors which discusses and reviews policies and guidelines with respect to our risk assessment and risk management for various risks, including, but not limited to, our interest
−Removed: rate, counter party, credit, capital availability, refinancing, and cybersecurity risks.
+Added: Additionally, we have a Finance and Risk Committee of our board of directors which discusses and reviews policies and guidelines with respect to our risk assessment and risk management for various risks, including, but not limited to, our interest rate, counter party, credit, capital availability, refinancing, and cybersecurity risks.
As it relates to environmental risks, when we underwrite and structure our investments the environmental risks and opportunities are an integral consideration to our investment parameters.
5 unchanged sentences
Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.