NAV and Investment Update

RNS Number : 0172S

Sequoia Economic Infra Inc Fd Ld

12 March 2021

 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES

12 March 2021

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Company")

NAV update

The NAV for SEQI, the specialist investor in economic infrastructure debt, increased to 102.04 pence per share from the prior month's NAV of 101.23 pence per share representing an increase of 0.81 pence per share.

A full attribution of the changes in the NAV per share is as follows:

	pence per share
January NAV	101.23
Interest income, net of expenses	0.57
FX movements, net of hedges	-0.13
Increase in asset valuations	0.37
February NAV	102.04

Portfolio update

Spreads tightening, driven by credit improvements, was evident across various sectors in the portfolio which resulted in uplifts to valuations of the assets where Covid-19 has impacted performance and are still closely monitored by the Investment Manager.

As at 26 February 2021, the Company had cash of £104.7m and had drawn £208.8m on its £280m Revolving Credit Facility. The Company also had undrawn commitments on existing investments collectively valued at £119.1m. The Company's invested portfolio comprised of 62 private debt investments and 10 infrastructure bonds across 8 sectors and 29 sub-sectors. It had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.7% and a cash yield of 5.5%. The weighted average portfolio life is approximately 4.5 years. Private debt investments represented 95% of the total portfolio and 61% of the portfolio comprised floating rate assets. The weighted average purchase price of the Company's investments was 97.3% of par. Investments which are pre-operational represented 8.2% of total assets.

The Company's invested portfolio remains geographically diverse with 46% located across the US, 19% in the UK, 30% in Europe, and 5% in Australia/New Zealand. Currently the Company is not investing in Portugal or Italy but has selectively invested in opportunities in Spain. The Company's pipeline of economic infrastructure debt investments remains strong and is diversified by sector, sub-sector, and jurisdiction. At month end, approximately 100% of the Company's NAV consisted of either Sterling assets or was hedged into Sterling. The Company has adequate resources to cover margin calls on its hedging book.

On 3 March, the Company announced a Placing of new ordinary shares raised £110m of gross proceeds. The proceeds of the issue were used to partially repay the Company's outstanding debt on 8 March. The effects of this issue will be reflected in the March investor report.

As announced on 10 March, the Company is pleased to publish its ESG policy, setting out the criteria and principles applied to its investing activities. The Board looks forward to providing an update on progress in implementing these in the Company's 2021 annual report.

The Company's settled investment activities during February include:

· A €45.0m primary Holdco loan to Camden B.V., a holding company with stakes in a portfolio of CCGT power assets in the Netherlands;

· An additional disbursement of $2.7m to Prime Data Centres for the development of a data centre campus in Sacramento, California;

· An additional $1.6m disbursement to Sunrun Safe Harbour, a leader in the US residential solar market; and

· An additional $0.6m disbursement to Bourzou Equity, a company created for a data centre in Virginia.

The following assets sold or prepaid in February:

· A $15.0m combined secondary acquisition of NewCold USA's Burley and Tacoma mezzanine loans, fully automated cold storage facilities with anchor tenants on long-term contracts;

· A €39.0m primary loan to Bizkaia Holdings, an operational CCGT power plant in the Basque region of Spain;

· A $0.1m term loan to Castlelake, an aircraft leasing company.

Ordinary Portfolio Summary (15 largest settled investments)

Investment name	Currency	Type	Ranking	Value £m (1)	Sector	Sub-sector	Cash-on-cash yield (%)	Yield to maturity / worst (%)
Madrid Metro	EUR	Private	HoldCo	66.0	Transport assets	Rolling stock	1.30	5.40
Infinis Energy	GBP	Private	Senior	65.0	Renewables	Landfill gas	5.00	5.00
AP Wireless Junior	EUR	Private	Mezz	60.9	TMT	Telecom towers	4.22	6.12
Hawaiki Mezzanine Loan	USD	Private	Mezz	53.9	TMT	Undersea cable	8.54	9.56
Tracy Hills TL 2025	USD	Private	Senior	52.8	Other	Residential infra	8.11	8.11
Warnow Tunnel	EUR	Private	Senior	52.1	Transport	Road	1.34	1.34
Expedient Data Centers	USD	Private	Senior	46.1	TMT	Data centers	5.68	5.85
Euroports 2nd Lien 2026	EUR	Private	Mezz	43.9	Transport	Port	7.80	7.88
Care4U Senior Secured	EUR	Private	Senior	43.8	Accomm.	Health care	6.00	6.00
Scandlines Mezzanine	EUR	Private	HoldCo	42.8	Transport	Ferries	0.00	9.13
Adani Abbot HoldCo 2021	AUD	Private	HoldCo	42.4	Transport	Port	5.62	15.80
Bannister Senior Secured	GBP	Private	Senior	41.6	Accomm.	Health care	6.54	6.75
Project Camden	EUR	Private	HoldCo	39.0	Power	Base load	7.50	7.50
Hawkeye Solar HoldCo	USD	Private	HoldCo	38.5	Renewables	Solar & wind	8.25	8.25
Jetpeaks HoldCo 2027	USD	Private	HoldCo	37.9	Power	Energy transition	7.48	8.02

Note (1) - excluding accrued interest

The Company's monthly investor report and additional portfolio disclosure will be made available at http://www.seqifund.com/ .

LEI: 2138006OW12FQHJ6PX91

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America.  This announcement is not an offer of securities for sale into the United States.  The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration.  No public offering of securities is being made in the United States.

For further information please contact:

Sequoia Investment Management Company      [phone]

Steve Cook

Dolf Kohnhorst

Randall Sandstrom

Greg Taylor

Anurag Gupta

Jefferies International Limited        [phone]

Gaudi le Roux

Neil Winward

Tulchan Communications (Financial PR)  [phone]

Martin Pengelley

Elizabeth Snow

Laura Marshall

Praxis Fund Services Limited (Company Secretary)                  [phone]

Matt Falla

Katrina Rowe 

About Sequoia Economic Infrastructure Income Fund Limited

The Company seeks to provide investors with regular, sustained, long-term distributions and capital appreciation from a diversified portfolio of senior and subordinated economic infrastructure debt investments. The Company is advised by Sequoia Investment Management Company Limited.

 

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