NAV and investment update

RNS Number : 5377Y

Sequoia Economic Infra Inc Fd Ld

17 January 2022

 

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

17^th January 2022

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 101.56 pence per share from the prior month's NAV of 101.12 pence per share, representing an increase of 0.44 pence per share.

	pence per share
November NAV	101.12
Interest income, net of expenses	0.77
FX movements, net of hedges	-0.07
Decrease in asset valuations	-0.26
December NAV	101.56

Portfolio update

As at 31 December 2021, the Company had cash of £153.8m and had drawn £120m on its £325m revolving credit facility. The Company also had undrawn commitments on existing investments collectively valued at £136.0m. The Company's invested portfolio consisted of 64 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 8.5% and a cash yield of 5.9%. The weighted average portfolio life is approximately 4.3 years. Private debt investments represented 93% of the total portfolio and 48% of the portfolio comprised floating rate assets. Investments which are pre ‑ operational represented 10.6% of total assets.

The Company's invested portfolio remains geographically diverse with 48% located across the US, 16% in the UK, 31% 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 continues to work closely with various stakeholders on the recovery of the Company's loan to Bulb Energy, while at the same time ensuring that the interests of consumers and the employees of Bulb are respected. The mark on the loan has been updated reflecting current information, resulting in a modest increase over the month. Further information will be provided as matters progress.

In addition, the Company's loan to a property in Washington DC that is leased to a private school has been slightly marked down this month due to a delay in the refinancing of the project. However, the owner of the property is actively engaged with new providers of capital to put the project on a stable footing and, should those efforts be successful, it is likely that a positive outcome can be secured for the Company's loan.

The Company has also received positive news on KWO, a German logistics and industrial park owner, as they have reached an agreement with the grid operator to settle past disputed environmental levy charges. This removes a material litigation risk from KWO and provides more predictability and visibility for the cash flows and the business model over the loan's tenor.

The Company's settled investment activities during December include:

• A purchase for $31.8m of Windstream bonds, a high-speed Broadband provider in the USA;

• An additional loan of €20.0m to Project Camden, an electricity generator in the Netherlands;

• A loan for £13.9m to Project Spinnaker, a high ‑ speed Broadband provider in the UK;

• An additional $4.0m loan to Sunrun Radcliffe, a manufacturer of solar energy equipment in the USA;

• An additional $0.6m disbursement to Lanthanum, a leading developer of hyperscale data centres in the USA.

The following assets sold or prepaid in December:

• A loan of £42.4m to Project Rose, an accommodation provider in the healthcare industry, based in the UK;

• A partial sale of €15.3m of Madrid Metro bonds, a Spanish-based public transport refinancing project;

• A loan of $13.2 to Terra-Gen, a renewables energy developer for wind, solar and energy storage facilities, based in the USA;

• A partial sale of €1.5m of Ziton Wind Enterprise Bonds, a specialised operations and maintenance service provider for offshore wind farms, based in Denmark.

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 (%)
Bannister Senior Secured	GBP	Private	Senior	65.2	Accommodation	Healthcare	6.60	6.86
Infinis Energy	GBP	Private	Senior	65.0	Renewables	Landfill Gas	5.00	5.00
AP Wireless Junior	EUR	Private	Mezz	59.9	TMT	Telecom Towers	4.22	6.13
Hawaiki Mezzanine Loan	USD	Private	Mezz	56.3	TMT	Undersea Cables	8.34	9.06
Hawkeye Solar HoldCo	USD	Private	HoldCo	54.9	Renewables	Solar & Wind	8.05	7.84
Project Camden	EUR	Private	HoldCo	54.7	Power	Base load	7.50	7.49
Madrid Metro	EUR	Private	HoldCo	54.3	Transport Assets	Rolling Stock	1.28	5.11
Brightline	USD	Private	Senior	51.7	Transport	Rail	8.00	8.00
AP Wireless US HoldCo	USD	Private	HoldCo	51.1	TMT	Telecom Towers	6.00	6.00
Tracy Hills TL 2025	USD	Private	Senior	50.7	Other	Residential Infra	8.10	8.10
Expedia Data Centers	USD	Private	Senior	48.0	TMT	Data centers	5.59	5.59
Project Nimble	EUR	Private	HoldCo	46.3	TMT	Data centers	8.05	8.04
Sacramento Data Centre	USD	Private	Senior	44.9	TMT	Data centers	7.00	7.00
Kenai HoldCo 2024	EUR	Private	HoldCo	42.9	Power	Base load	-	10.74
Euroports 2nd Lien 2026	EUR	Private	Mezz	42.9	Transport	Port	7.75	7.63

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

Sanne Fund Services Guernsey 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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