Net Asset Value and Investment Update

RNS Number : 2643Y

Sequoia Economic Infra Inc Fd Ld

16 May 2016

 

16 May 2016

Sequoia Economic Infrastructure Income Fund Limited

Net Asset Value as at 29 April 2016 and Investment Update

Company update

As of the 29th April 2016, the Company held 17 infrastructure bonds and 19 private debt investments, collectively valued at £286.9m including accrued interest, with an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.1% and a weighted average life across the acquired portfolio of approximately 5.9 years.

The investments are diverse across the UK, Western Europe, Australia, Canada and the US and include a wide range of asset types including road, rail, utility, power, shipping, renewables and aircraft leasing.

Approximately 53% of the Company portfolio comprised of floating rate assets, with only four LIBOR floors (other than those at zero percent). As such the portfolio's yield is likely to increase over time if LIBOR increases.

Investments in April include senior secured bonds issued by All Aboard Florida, owner and developer of a privately-owned express passenger rail infrastructure project between Miami and Orlando. In addition, the company has made an incremental investment in Green Plains Processing LLC.

During the month, the Company had its position in Viridian Group Holdings 13.5% 2020 private bonds called by the issuer. The result was a 20.5% realised IRR (annualised) on a par amount of approximately £5m.

Company NAV performance

The decrease in Company NAV to 97.69p per share (ex-div) arose primarily through:

·       Interest income net of expenses of 0.33p;

·       A gain of 1.22p in asset valuations;

·       A dividend declared of 1.50p; and

·       A decline of 0.56p on net FX movements.

Portfolio Summary (15 largest settled investments)

Transaction name	Currency	Type	Ranking	Value £mm (1)	Sector	Sub-sector	Yield to maturity / worst (%)
A'lienor S.A.S. (A65)	EUR	Private	Senior	28.4	Transport	Road	5.33
Infinis Bridge	GBP	Private	HoldCo	24.0	Renewables	Solar & Wind	8.70
Exeltium Mezzanine	EUR	Private	Mezz	17.8	Power	PPA	8.83
Danaos Snr Secured 2018	USD	Private	Senior	17.3	Transport assets	Shipping	9.59
Neoen Production 1 S.A.S.U	EUR	Private	HoldCo	15.3	Renewables	Solar & Wind	6.99
Biffa TL A	GBP	Private	Senior	13.0	Utility	Waste	6.73
Green Plains TL B	USD	Private	Senior	9.2	Other	Alternative Fuel	10.89
Dulles Greenway 2029	USD	Public	Senior	8.4	Transport	Road	6.85
Reliance Rail Finance 2018	AUD	Private	Senior	8.1	Transport assets	Rolling Stock	7.28
North Las Vegas Water 6.572% 2040	USD	Public	Senior	8.0	Utility	Water	6.79
Bristow Group 6.25% 2022	USD	Public	Mezz	7.7	Transport assets	Aircraft	10.38
Columbia Pipeline 5.8% 2045	USD	Public	Senior	7.2	Utility	Pipelines	5.40
NRG Energy Inc 7.785% 2021	USD	Public	Senior	7.1	Power	Elec Generation	6.61
All Aboard Florida	USD	Public	Senior	6.7	Transport	Rail	13.34
Care UK L+500 2019	GBP	Public	Senior	6.6	Accommodation	Elderly Care	11.42

Note (1) - excluding accrued interest

Market Summary

April showed limited activity in the infrastructure debt sector with six transactions closing across the UK and Western Europe. Notable deals included the €830m refinancing of Italian Passante di Mestre toll road, as well as the €750m bond issuance by Spanish energy company Engas. In addition, the Foresight Solar Fund refinanced its acquisition facility through a £160m long-term debt facility.

Opportunities in selected markets remained strong with US spread widening providing scope to improve credit quality and shorten duration. The emergence of new asset classes over the longer term, such as broadband and electricity storage, are creating new demand for infrastructure financing. 

Sterling continued strengthening against the US dollar during the month, moving from $1.44 to $1.46. Sterling remained relatively flat against the euro in April.

The Bloomberg USD High Yield Corporate Bond Index increased to 156 from 150. 10-year US Treasury yields increased over the month from 1.77% to 1.83%, following three months of consecutive decline.

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

Sequoia Investment Management Company

Randall Sandstrom / Steve Cook                         Telephone [phone]

Stifel Nicolaus Europe Limited

Neil Winward / Mark Bloomfield / Gaudi Le Roux              Telephone [phone]

International Fund Management Limited

Chris Hickling                                                                Telephone [phone]

About Sequoia Economic Infrastructure Income Fund Limited

The Company is a Guernsey registered closed-ended investment company that 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.  The Company has been advised that the Shares can be considered as "excluded securities" for the purposes of the FCA rules regarding the definition and promotion of Non-Mainstream Pooled Investments (NMPIs).

 

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