4Q22 Portfolio Valuations & Recent Activity

RNS Number : 7498N

Riverstone Credit Opps. Inc PLC

25 January 2023

 

25 January 2023

Riverstone Credit Opportunities Income

Quarterly Update

Full Deployment Reached Despite Continued Successful Realisations

Riverstone Credit Opportunities Income ("RCOI" or the "Company"), the LSE-listed energy infrastructure and energy-transition credit investor, is pleased to announce its quarterly portfolio summary as of 31 December 2022, inclusive of updated quarterly unaudited fair market valuations.

Unaudited Net Asset Value

As of 31 December 2022, the unaudited net asset value per Ordinary Share, including net revenue for the quarter ended 31 December, was $1.08 ($1.10: 30 September 2022). This reduction was principally due to a movement in the valuation of an equity position.

Period Highlights

· Established track record of attractive realisations continues:

o Circulus Solutions realised on 6 October 2022 at 16.6 percent gross IRR and a 10.8 percent

   net IRR and 1.14x gross MOIC and a 1.09x net MOIC

o Hoover Circular Solutions initial investment realised on 30 November 2022 at 15.0 percent

   gross IRR and a 7.8 percent net IRR and a 1.10x gross MOIC and a 1.05x net MOIC; in

   addition, loan amended and extended to 30 November 2026

· Continues to invest capital in active pipeline of infrastructure, infrastructure services and energy transition opportunities to keep the fund substantially committed.

o On 30 November 2022, closed a new sustainability-linked first lien term loan to Hoover 

    Circular Solutions, which refinanced the prior position.

o On 22 December 2022, closed a sustainability-linked first lien term loan to Clean Energy  

    Fuels Corp. ("Clean Energy Fuels" or "CLNE"). At close on 22 December 2022, RCOI

    committed $13.9 million.

o On 30 December 2022, closed a $28.6 million sustainability-linked, first lien term loan to

   a  subsidiary of Max Midstream. At close on 30 December 2022, RCOI committed $5.0

   million.

o Throughout Q4 2022, committed an additional $2.1 million of capital as part of an upsize

   for Harland & Wolff Group Holdings PLC

· Successfully closed a $15.0 million senior secured revolving credit facility on 7 December 2022 aiming to further enhance returns.  

Portfolio Summary / Lifetime Key Performance Indicators

· Portfolio of 100% floating rate, short duration, senior secured loans supporting RCOI's ambition to deliver annual returns to shareholders of 8-10%

· 33.7% NAV total return⁵ since IPO in May 2019 (14.5% annual return for 2022)

· 22.6 cents in dividends paid since inception⁶

Market Update

· With the strong backdrop of energy market performance, the important global priority of de-carbonisation and the Company's unique focus on short duration lending - the re-balancing of the portfolio to energy-transition focused investments is now complete. 

· There was a slight reduction in our NAV per share in Q4 2022 versus Q3 2022 ($1.10 to $1.08), due mainly to a reduction in the mark on the common equity investment in Seawolf Water Resources. While the business remains fundamentally healthy as it continues to expand into new markets, the near-term outlook for its core business of brackish water supply was modestly reduced, resulting in a decrease in valuation.  

· Based on the current portfolio commitments, as well as the addition of the revolving credit facility, we believe the ability to maintain near full deployment is achievable.

Reuben Jeffery III, Chairman of RCOI, commented:

"Q4 2022 was very encouraging for RCOI given further profitable realisations as well as new commitments in our target sectors. I believe the Company is well-positioned to continue to provide attractive returns from its portfolio as well as through new senior secured investments from the considerable pipeline of opportunities progressing through due diligence. Underlying rates are as high as they've been in our history, and now with the Company's capital fully deployed, we expect our shareholders to benefit from the increased earnings power of the portfolio.

Since launch in May 2019, a period that has included challenging conditions for equity investors, we are pleased that the Company has delivered a total NAV return⁵ of 33.7% (14.5% annual return for 2022) including 22.6 cents per share in dividend distributions⁶."

Christopher Abbate and Jamie Brodsky, Co-Founders of Riverstone Credit, the investment adviser, added:

" We achieved two key milestones in the fourth quarter. First, as of year-end, RCOI's portfolio is now comprised almost exclusively of Green and Sustainability-Linked loans, representing approximately 95% of NAV. Second, with the closing of our revolving credit facility in December, the Company is now able to better manage its liquidity needs, allowing for higher deployment of capital. With the Max Midstream deal completed on the last business day of the year, RCOI is now 102% committed and approaching 100% invested.

"In an active fourth quarter, RCOI had $23.9 million of realisations and committed $34.6 million of new capital in four investments, a refinancing of Hoover Circular Solutions, an upsize to Harland & Wolff Group Holdings PLC, Clean Energy Fuels Corp., and Max Midstream. We are pleased to have completed  over 10 deal realisations since the start of COVID, all with a blended gross IRR of 17% (net IRR of 13%), demonstrating the resilience of our investment strategy. We look forward to a productive 2023."

Cumulative Portfolio Summary

Unrealised Portfolio[1]

Investment Name		Subsector	Commitment Date	Cumulative Committed Capital ($mm)	Cumulative Invested Capital ($mm)	Gross Realised Capital ($mm)1	Gross Unrealised Value ($mm)	Gross Realised Capital & Unrealised Value ($mm)	% of Par as of 31 Dec 20222	% of Par as of 30 Sept 20222	31 Dec 2022 Gross MOIC	31 Dec 2022 Net MOIC
Caliber Midstream3		Infrastructure	Aug-19	4.0	4.0	0.5	0.5	1.0	40.72%	40.71%	0.25x	0.20x
Imperium3NY LLC		Energy Transition	Apr-21	6.8	5.4	6.7	2.7	9.4	2.704	2.494	1.75x	1.70x
Blackbuck Resources LLC		Infrastructure	Jun-21	11.5	11.0	2.3	10.8	13.1	100.83%	100.44%	1.18x	1.13x
Streamline Innovations Inc.		Infrastructure Services	Nov-21	13.8	6.8	1.0	7.1	8.0	99.57%	99.12%	1.17x	1.12x
Harland & Wolff Group Holdings PLC		Infrastructure Services	Mar-22	14.6	14.6	1.2	15.7	16.8	102.49%	96.98%	1.15x	1.10x
Seawolf Water Resources		Services	Sept-22	9.0	9.0	0.1	13.0	13.1	13.024	14.294	1.46x	1.41x
EPIC Propane Pipeline, LP		Infrastructure	Sept-22	13.9	13.9	0.5	13.9	14.4	99.08%	99.00%	1.04x	0.99x
Hoover Circular Solutions		Infrastructure Services	Nov-22	13.7	13.7	0.1	13.9	14.0	98.05%	NA	1.02x	0.97x
Clean Energy Fuels Corp		Energy Transition	Dec-22	13.9	13.9	0.1	13.9	14.0	99.00%	NA	1.01x	0.96x
Max Midstream		Infrastructure	Dec-22	5.0	5.0	0.1	5.0	5.1	100.00%	NA	1.01x	0.96x
				$106.2	$97.3	$12.6	$96.4	$109.0			1.12x	1.07x
	Direct Lending Consolidated Portfolio Key Stats at Entry As of 31 December 2022
	Weighted Avg. Entry Basis					97.5%
	Weighted Avg. All-in Coupon at Entry					9.64 p.a.
	Weighted Avg. Undrawn Spread at Entry					4.0 p.a.
	Weighted Avg. Tenor at Entry					3.1 years
	Weighted Avg. Call Premium at Entry					102.8
	Security					100% Secured

Realised Portfolio

Investment Name	Subsector	Commitment Date	Realisation Date	Cumulative Committed Capital ($mm)	Cumulative Invested Capital ($mm)	Gross Realised Capital ($mm)1	31 Dec 2022 Gross MOIC	31 Dec 2022 Net MOIC
Rocky Creek Resources	Exploration & Production	Jun-19	Dec-19	6.0	4.3	4.9	1.15 x	1.10 x
CIG Logistics	Infrastructure Services	Jan-20	Jan-20	8.7	8.7	8.9	1.02 x	0.97 x
Mallard Exploration	Exploration & Production	Nov-19	Apr-20	13.8	6.8	7.7	1.13 x	1.08 x
Market Based	Multiple	Aug-20	Nov-20	13.4	13.4	13.6	1.01 x	0.96 x
Project Yellowstone	Infrastructure	Jun-19	Mar-21	5.8	5.8	7.2	1.23 x	1.18 x
Ascent Energy	Exploration & Production	Jun-19	Jun-21	13.3	13.3	16.1	1.21 x	1.16 x
Pursuit Oil & Gas	Exploration & Production	Jul-19	Jun-21	12.3	12.3	15	1.22 x	1.16 x
U.S. Shipping	Infrastructure Services	Feb-21	Aug-21	6.5	6.5	7.3	1.13 x	1.07 x
Aspen Power Partners	Infrastructure	Dec-20	Oct-21	6.9	3.4	4.3	1.27 x	1.22 x
Project Mariners	Infrastructure Services	Jul-19	Apr-22	13.2	13.2	17.6	1.33x	1.28 x
Roaring Fork Midstream	Infrastructure	Mar-21	Jun-22	5.9	5.9	6.9	1.16x	1.11 x
FS Crude, LLC	Infrastructure	Mar-20	Sept-22	13.7	13.7	16.9	1.23x	1.18 x
EPIC Propane Pipeline, LP	Infrastructure	Dec-19	Sept-22	14.8	14.8	19.6	1.32x	1.27 x
Circulus Holdings, PBLLC	Infrastructure	Aug-21	Oct-22	12.3	12.3	14.0	1.14x	1.09 x
Hoover Circular Solutions	Infrastructure Services	Oct-20	Nov-22	15.4	15.4	17.0	1.10x	1.05 x
				$162.1	$149.8	$176.8	1.18x	1.13x

The Gross Realised Capital column includes interest, fee income, and principal received. The Gross Unrealised Value column includes the amortization of OID, accrued interest, fees and any unrealised change in the value of the investment.

For Riverstone Credit Opportunities Income Plc:

Adam Weiss

[phone]

J.P. Morgan Cazenove (Corporate Broker)	[phone]
William Simmonds
Jérémie Birnbaum
James Bouverat (Sales)

 

 

Media Contacts:

Buchanan

Helen Tarbet Henry Wilson Jon Krinks Verity Parker

Tel: [phone] Tel: [phone] Tel: [phone] Tel: [phone] Email:   [e-mail]

About Riverstone Credit Opportunities Income Plc :

RCOI lends to companies that build and operate the infrastructure used to generate, transport, store and distribute both renewable and conventional sources of energy, and companies that provide services to that infrastructure. RCOI also lends to companies seeking to facilitate the energy transition by decarbonizing the energy, industrial and agricultural sectors, building sustainable infrastructure and reducing or sequestering carbon emissions. The Company seeks to ensure that its investments are having a positive impact on climate change by structuring each deal as either a green loan or a sustainability-linked loan, documented using industry best practices.

For further details, seehttps://www.riverstonecoi.com/.

Neither the contents of RCOI's website nor the contents of anywebsite accessible fromhyperlinkson the websites(oranyotherwebsite) is incorporated into, or forms partof, this announcement.

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1 Gross realised capital is total gross income realised on invested capital.

² Includes fair market value of equity and rights where applicable as a percentage of par.

³ Includes Caliber HoldCo Escrow, Caliber MFC LLC equity, Caliber Midstream Revolver & Priming Facility.

⁴ Reflects the total fair market value in millions.

⁵ NAV total return equals cumulative paid dividend cents per share and NAV per share as of 31 December 2022 divided by the opening capital net of share issuance costs as of 28 May 2019.

⁶ Reflects cumulative dividend cents per share declared as of 30 September 2022 and paid as of 31 December 2022.

 

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