Net Asset Value(s)

RNS Number : 0963L

Sequoia Economic Infra Inc Fd Ld

17 April 2018

 

17 April 2018

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Company")

Net Asset Value as at 29 March 2018 and Investment Update

Ordinary Share update

The NAV for SEQI, the specialist investor in economic infrastructure debt, decreased to 101.32p per share from 101.46p per share on 28 February 2018 which arose primarily through:

·      Interest income net of expenses of 0.60p;

·      A decrease of 0.60p in asset valuations;

·      A decrease of 0.14p from FX movements.

The Company's total portfolio comprised of 59 investments collectively valued at £830.1m (including accrued interest) across 8 sectors and 24 subsectors, and represented 108.6% of the Company's NAV. The Company's total portfolio includes undrawn commitments and 3 additional investments which are in the process of settlement, collectively valued at £107.7m. As at 29 March 2018, the Company drew an additional $25.0m on its revolving credit facility, resulting in gross leverage of £39.2m representing c. 5.2% of NAV.

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 79% of the total portfolio and 64% of it comprised floating rate assets. The weighted average purchase price of the Company's investments was c. 95.1% of par.

Investments which are pre-operational represented 17.9% of total assets.

The Company continues to view the US as a strategic target for economic infrastructure assets, with 40% of the invested portfolio consisting of investments located in the US as at 29 March 2018. The other represented regions include the UK, Europe, and Australia/New Zealand, comprising 29%, 24%, and 8% of the invested portfolio, respectively. Currently the Company is not investing in Portugal or Italy, but is considering selective opportunities in Spain.

As at 29 March 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 March include:

·      An additional $15.0m primary loan to Hawaiki Cable, the undersea cable connecting Australia to North America;

·      A further £10.0m drawing on the loan to Bulb Energy, a UK renewable energy supplier backed by customer receivables;

·      A $12.0m primary loan to Sunrun Hera, a portfolio of US rooftop solar systems;

·      A $20.0m secondary acquisition of a loan to Panda Patriot, a CCGT plant in the US;

·      A €4.3m secondary acquisition of a loan to Orlyval, the train linking Paris Orly airport to the metro network;

·      An additional £1.2m disbursement to Clyde Street student housing in Glasgow.

Additionally, the Company added to the following existing public positions: A $2.5m loan to Terra-gen, $3.3m of Exmar 2019 USD bonds, and $3.0m of Talen 10.5% 2026 bonds.

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	49.2	TMT	Undersea cable	11.9
A'lienor S.A.S. (A65)	EUR	Private	Senior	39.4	Transport	Road	5.0
Active Assistance	GBP	Private	Senior	36.4	Accomm.	Health care	8.4
Tracy Hills TL 2025	USD	Private	Senior	34.2	Other	Residential infra	10.3
Cory Environmental	GBP	Private	HoldCo	31.3	Utility	Waste-to-energy	8.5
Bulb Energy Senior Secured	GBP	Private	Senior	26.9	Utility	Electricity supply	9.0
Warnow Tunnel	EUR	Private	Senior	25.1	Transport	Road	6.8
Aquaventure	USD	Private	Senior	25.0	Utility	Water	7.7
Abteen Ventures	USD	Private	Senior	24.9	TMT	Data centers	8.0
Terra-Gen Power TL B	USD	Private	Senior	22.4	Renewables	Solar & wind	9.5
Natgasoline	USD	Private	Mezz	20.6	Other	Industrial infra	10.0
Exeltium Mezzanine	EUR	Private	Mezz	19.3	Power	PPA	9.4
Welcome Break No.1 Ltd	GBP	Private	Mezz	18.3	Transport	Motorway services	8.5
Clyde Street Glasgow	GBP	Private	Senior	18.3	Accomm.	Student housing	8.0
Neoen Production	EUR	Private	HoldCo	15.4	Renewables	Solar & wind	7.0

Note (1) - excluding accrued interest

Market Summary

A total of 64 project finance transactions closed in March throughout the Company's eligible jurisdictions, worth $28.3bn in aggregate. Notable transactions during the month include:

·      A €183m financing of the development and rollout of the 25-year Herault department broadband PPP Project in France;

·      A €511m refinancing of the Koole Terminals, a Dutch storage facilities operator;

·      A CAD$202m revolving credit facility for the upgrade of transit stations in Ontario's Stouffville Corridor;

·      The CAD$131m debt funding for the redevelopment of Brockville General Hospital in Ontario.

In March, Q4 2017 US GDP growth was revised slightly downwards to 2.9%, for a full-year 2017 GDP growth rate of 2.3%. The US Federal Reserve raised interest rates 0.25% to 1.75%.

The UK economy appears to be on track for 0.3% growth for Q1 2018, with freezing weather conditions adversely impacting the economy. During March, both the Euro and the US dollar weakened against Sterling ending the month at €1.1404 and $1.4017 respectively.

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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