Asset-Backed Nonrecourse Debt

In September 2015, we closed a private placement securitization transaction, pursuant to which HASI SYB Trust 2015-1 (the “Issuer”) issued (i) $101 million in aggregate principal amount of 4.28% HASI SYB 2015-1A, Class A Bonds (the “Class A Bonds”) and (ii) $18 million in aggregate principal amount of 5.0% HASI SYB 2015-1B, Class B Bonds (the “Class B Bonds” and together with the Class A Bonds, the “Bonds”), both with an anticipated repayment date in October 2034. The Class A Bonds rank senior to the Class B Bonds in priority of payment. We retained the Class B Bonds.

The Bonds are payable from, and secured by, all assets of HASI SYB Trust 2015-1, which consist primarily of the membership interests in 22 special purpose subsidiaries owning a portfolio of real property arrangements relating to solar and wind projects. These membership interests were contributed and sold to the Issuer by one of our subsidiaries. We act as servicer for the bonds. We did not guarantee the bonds or the collectability of the cash flows of the contributed assets. We have guaranteed the performance of the representations and warranties and other obligations of certain of our subsidiaries under the transaction documents (other than the Issuer’s payment obligations in respect of the Bonds) and provided an indemnify against certain losses from “bad acts” of such subsidiaries including fraud, failure to disclose a material fact, theft, misappropriation, voluntary bankruptcy or unauthorized transfers, in each case up to an aggregate amount not to exceed the outstanding balance of the Bonds plus accrued and unpaid interest with respect to the Bonds (which limitation shall not apply to environmental claims that are covered by the indemnity).

We have outstanding the following nonrecourse asset-backed debt (dollars in millions):

Outstanding amounts under the nonrecourse asset-backed debt agreement and the value of assets pledged as security for the loans are as follows (dollars in millions):

We have pledged the ownership interest in the relevant assets or the relevant assets themselves to bankruptcy remote entities as security for the nonrecourse debt. The assets and credit of these entities are not available to satisfy any of our other debts and obligations, except as set forth in the loan agreements. The debtors can only look to the cash flows of the pledged assets to satisfy the debt and we are not liable for nonpayment of such cash flows. The nonrecourse debt agreements contains terms, conditions, covenants, and representations and warranties that are customary and typical for a transaction of this nature, including limitations on the incurrence of liens and indebtedness, investments, fundamental organizational changes, dispositions, changes in the nature of business, transactions with affiliates, use of proceeds and stock repurchases. The agreements also include customary events of default, the occurrence of which may result in termination of the agreements, acceleration of amounts due, and accrual of default interest.

We incurred approximately $6 million of costs associated with our asset-backed nonrecourse debt that have been capitalized (included in other assets on the consolidated balance sheets) and are being amortized using the effective interest method over the respective term.

Other Nonrecourse Debt

We have other nonrecourse debt that was used to finance certain of our financing receivables for the term of the financing receivables. Amounts due under nonrecourse notes are secured by financing receivables with a carrying value of approximately $101 million and $108 million as of September 30, 2015 and December 31, 2014, respectively, and there is no recourse to our general assets. Debt service payment requirements, in a majority of cases, are equal to or less than the cash flows received from the underlying financing receivables.

Analyses of other nonrecourse debt by interest rate are as follows:

The stated minimum maturities of nonrecourse debt as of September 30, 2015, were as follows: