Net Asset Value(s)

RNS Number : 1887O

Sequoia Economic Infra Inc Fd Ld

16 May 2018

 

16 May 2018

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Company")

Net Asset Value as at 30 April 2018 and Investment Update

Ordinary Share update

The NAV for SEQI, the specialist investor in economic infrastructure debt, increased to 100.39p from 99.82p per share (being the 29 March cum-income NAV less the dividend declared in respect of the quarter ended 29 March). The changes in NAV arose primarily through:

·      Interest income net of expenses of 0.72p;

·      A decrease of 0.11p in asset valuations;

·      A decrease of 0.04p from FX movements.

On 19 April 2018, the Company declared a dividend of 1.5p per share to shareholders on the register as at 27 April 2018, in respect of the quarter ended 29 March 2018.

During April, the Company drew an additional £35.0m on its revolving credit facility, resulting in gross leverage of £75.0m representing c. 10.0% of NAV, and total gross assets of £838.5m. The Company's total net assets after deducting net borrowings were therefore £751.5m as at 30 April 2018. The Company also had undrawn commitments and one additional investment in the process of settlement collectively valued at £29.9m.

On 4 May 2018, the Company completed its successful, oversubscribed equity placing, raising approximately £75.7m of gross proceeds. The proceeds have principally been used to repay approximately £70.7m of the Company's £75.0m gross leverage.

The Company's invested portfolio comprised of 36 private debt investments and 20 infrastructure bonds across 8 sectors and 23 subsectors, and had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.2% and a weighted average life of approximately 5.1 years. Private debt investments represented 80.0% of the total portfolio and 68.8% of it comprised floating rate assets. The weighted average purchase price of the Company's investments was c.95.2% of par. Investments which are pre-operational represented 14.6% of total assets.

The Company's invested portfolio remains geographically diverse with 45% located across the US, 25% in the UK, 23% in Europe, and 8% in Australia/New Zealand. Currently the Company is not investing in Portugal or Italy, but is considering selective opportunities in Spain.

As at 30 April 2018, approximately 94% of NAV consisted of either Sterling assets or was hedged into Sterling. The Company has adequate resources to cover the cash costs associated with its hedging activities.

The Company's settled investment activities during April include:

·      A $65.0m primary loan to Salt Creek Midstream, a midstream gas gathering and processing plant in West Texas;

·      A final disbursement of $28.0m, a portfolio of US rooftop solar systems;

·      A £13.7m primary loan to Elysium Healthcare, a UK behavioural health services provider; and

·      An additional £4.0m of Theatre Hospitals plc bonds.

Lastly, two loans repaid during the month in line with the Company's expectations:

·      The £36.0m bridge loan to Active Assistance; and

·      The $28.9m loan to Natgasoline.

Ordinary Portfolio Summary (15 largest settled investments)

Transaction name	Currency	Type	Ranking	Value £m(1)	Sector	Sub-sector	Yield to maturity / worst (%)
Hawaiki Mezzanine Loan	USD	Private	Mezz	50.6	TMT	Undersea cable	11.9
Salt Creek Midstream	USD	Private	Senior	47.2	Utility	Midstream	6.8
A'lienor S.A.S. (A65)	EUR	Private	Senior	38.9	Transport	Road	3.8
Tracy Hills TL 2025	USD	Private	Senior	34.8	Other	Residential infra	10.3
Cory Environmental	GBP	Private	HoldCo	31.3	Utility	Waste-to-energy	8.5
Sunrun Hera 2017-B	USD	Private	Mezz	29.1	Renewables	Solar & Wind	7.4
Bulb Energy Senior Secured	GBP	Private	Senior	26.9	Utility	Electricity supply	9.0
Aquaventure	USD	Private	Senior	25.4	Utility	Water	8.2
Abteen Ventures	USD	Private	Senior	25.4	TMT	Data centers	8.0
Warnow Tunnel	EUR	Private	Senior	25.3	Transport	Road	6.9
Terra-Gen Power TL B	USD	Private	Senior	22.6	Renewables	Solar & wind	9.8
Exeltium Mezzanine	EUR	Private	Mezz	19.3	Power	PPA	9.4
Clyde Street Glasgow	GBP	Private	Senior	19.2	Accomm.	Student housing	8.0
Welcome Break No.1 Ltd	GBP	Private	Mezz	18.3	Transport	Motorway services	8.7
Theatre 2007-1 D	GBP	Public	Mezz	15.4	Other	Private Hospitals	12.0

Note (1) - excluding accrued interest

Market Summary

A total of 28 project finance transactions closed in April throughout the Company's eligible jurisdictions, worth $6.5bn in aggregate. Notable transactions during the month include:

·      A €434m refinancing of the A355 motorway in Strasbourg, France, comprised of a bank loan and an EIB loan;

·      A $210m financing of the construction and development of the 161.3MW Pine River Wind Farm in Michigan, United States;

·      A €78m EIB loan for the construction of the Kajaani hospital in North East Finland, intended to replace the current, outdated hospital.

In April, the estimate of Q1 GDP growth in the US had slowed to 0.6%, down from 0.7% growth in Q4 2017. Unemployment fell to a 17-year low of 3.9% at the end of the quarter.

Eurozone economic growth in Q1 2018 slowed to 0.4% across the bloc, down from 0.7% in Q4 2017, and the lowest growth rate seen since summer 2016.

The UK economy grew at an even slower pace, posting only 0.1% growth for the first quarter 2018, the lowest in five years.

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

LEI: 2138006OW12FQHJ6PX91

For further information please contact:

Sequoia Investment Management Company                           [phone]

Steve Cook

Dolf Kohnhorst

Randall Sandstrom

Greg Taylor

Stifel Nicolaus Europe Limited                                                [phone]

Neil Winward

Mark Bloomfield

Gaudi Le Roux

Tulchan Communications (Financial PR)                                 [phone]

James Macey White

Martin Pengelley

Elizabeth Snow 

Praxis Fund Services Limited (Company Secretary)               [phone]

Matt Falla                                                                     

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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