NAV and Investment Update

RNS Number : 6307L

Sequoia Economic Infra Inc Fd Ld

14 September 2021

 

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

14 September 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 102.09 pence per share from the prior

month's NAV of 101.86 pence per share, representing an increase of 0.23 pence per share. A full attribution of the changes in the NAV per share is as follows:

	pence per share
July NAV	101.86
Interest income, net of expenses	0.58
FX movements, net of hedges	-0.34
Increase in asset valuations	-0.01
August NAV	102.09

Portfolio update

As at 31 August 2021, the Company had cash of £145.5m and had drawn £83.9m on its £280m revolving credit facility. The Company also had undrawn commitments on existing investments collectively valued at £117.9m. The Company's invested portfolio comprised of 63 private debt investments and 12 infrastructure bonds across 8 sectors and 30 sub-sectors. It had an annualised yield-to-maturity (or yield-to ‑ worst in the case of callable bonds) of 9.3% and a cash yield of 5.9%. The weighted average portfolio life is approximately 4.4 years. Private debt investments represented 94% of the total portfolio and 50% of the portfolio comprised floating rate assets. The weighted average purchase price of the Company's investments was 99.0% of par. Investments which are pre-operational represented 15.2% of total assets. The Company's invested portfolio remains geographically diverse with 46% located across the US, 21% in the UK, 28% 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.

The Investment Adviser, the Investment Manager, and PWC, the independent valuation agent continue to observe the previously identified uplift in valuations of the assets where COVID-19 has impacted performance to materialise. This trend is expected to persist as economies continue to recover and countries further open up on the back of their vaccination programmes. Talen performance continues to be poor as the company works through its plans to address its high debt load in light of its adverse performance, driven, as we understand it, primarily by an out-of ‑ the money hedging programme which has led to cash and non-cash losses which we further understand to be one-off adjustments with underlying operating performance net of these items remaining average. The Investment Adviser continues to proactively monitor this holding.

On 5 July 2021, the Company published its Annual Report   for the year ended 31 March 2021 which is available on its website (see results presentation ). The Board was pleased to announce a total NAV return of 13.5% in the year and an improvement to the portfolio's ESG profile year on year.

The Company's settled investment activities during August include:

• Another $5.0m bond purchase of Inmarsat, the largest UK satellite communications company;

• An additional $1.2m disbursement to Lanthanum, a leading developer of hyperscale data centres in Virginia;

• An additional £6.5m loan to Trident Bidco, an acquisition financing facility for specialist healthcare in the UK;

• An additional £1.0m loan to Lloyds Development Limited, a hotel development in Glasgow; and

• An $35.0m loan to Brightline, a privately owned passenger rail project in Florida.

The following assets sold or prepaid in August:

• A $30.0m primary loan to Prometheus Energy, a leading independent fuel distributor and convenience store retailer in the US;

• A $30.0m Primary loan to CSG Holdings backed by 7 interconnecting natural gas pipelines throughout the US; and

• A $30.0m Opco loan to Cardinal States Gathering Company LLC backed by 7natural gas pipelines throughout the US.

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	66.8	Transport assets	Rolling stock	5.4	5.40
Infinis Energy	GBP	Private	Senior	65.0	Renewables	Landfill gas	5.0	5.00
AP Wireless Junior	EUR	Private	Mezz	60.9	TMT	Telecom towers	6.1	6.13
Bannister Senior Secured	GBP	Private	Senior	55.5	Accomm.	Health care	6.6	6.57
Hawkeye Solar HoldCo 2030 1, 2, and 3	USD	Private	HoldCo	54.9	Renewables	Solar & wind	7.8	7.84
Hawaiki Mezzanine Loan	USD	Private	Mezz	54.7	TMT	Undersea cable	9.5	9.51
Bulb Senior TL 2021	GBP	Private	Senior	54.7	Utility	Electricity supply	7.0	7.05
Tracy Hills TL 2025	USD	Private	Senior	53.6	Other	Residential infra	8.1	8.08
AP Wireless US Holdco	USD	Private	HoldCo	50.3	TMT	Telecom towers	6.0	6.00
Expedient Data Centers Senior Secured 2026	USD	Private	Senior	46.7	TMT	Data centers	5.8	5.75
Scandlines Mezzanine 2032	EUR	Private	HoldCo	44.4	Transport	Ferries	9.6	9.56
Sacramento Data Centre Senior Secured 2028	USD	Private	Senior	44.4	TMT	Data centers	6.9	6.94
Care4U Senior Secured 2026	EUR	Private	Senior	43.5	Accomm.	Health care	6.0	6.00
Euroports 2nd Lien 2026	EUR	Private	Mezz	43.4	Transport	Port	8.0	7.99
Project Rose	GBP	Private	Senior	40.0	Accomm.	Health care	6.8	6.84

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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