Net Asset Value(s) 30 November 2016

RNS Number : 7631R
Sequoia Economic Infra Inc Fd Ld
14 December 2016
 

14 December 2016

Sequoia Economic Infrastructure Income Fund Limited

Net Asset Value as at 30 November 2016 and Investment Update

Ordinary Share update

As of the 30th November 2016, the Company held 26 private debt investments and 13 infrastructure bonds for a total of 39 investments across 8 sectors and 21 subsectors, which are collectively valued at £466.6m including accrued interest, with an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.2% and a weighted average life across the acquired portfolio of approximately 4.6 years.

Approximately 50% of the Ordinary Share portfolio comprises floating rate assets, with only two LIBOR floors above current LIBOR levels (of which one is Sterling and the other is Euros). As such, the portfolio's yield is likely to rise over time as LIBOR increases.

The investments are 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 and ship leasing.

Over the month of November, the Company acquired four new assets, one of which includes debt issued by Heathrow Finance Plc, further increasing portfolio diversification as the first airport asset. The other investments made during the month of November include:

·       Bonds issued by a UK-based electricity transmission company that owns and operates high voltage transmission networks in England and Wales;

·       An incremental investment in the A65 toll road in France which has significantly outperformed its 2016 traffic projections.

The Company sold its position in First Energy Solutions for the purpose of risk management.

Sterling strengthened against both of the dollar and the euro during the month of November, however the Investment Adviser remains committed to reducing NAV volatility arising from FX movements by maintaining its hedging strategy. As of the 30th November 2016, approximately 82% of NAV was either Sterling assets or hedged into Sterling, which is a slight increase from 80% three months prior.

The Company has more than adequate resources to cover the cash costs associated with its hedging book. Each of its FX hedge providers has credit lines to the Company which means that the margin calls on the hedge portfolio have been modest.

The decrease in the Ordinary Share NAV to 101.36p from 102.00p per share arose primarily through:

·       Interest income net of expenses of 0.38p;

·       A decrease of 0.47p in asset valuations; and

·       A decrease of 0.56p in FX movements.

Placing Programme Result

The Company is pleased to confirm that the Ordinary Share placing programme announced on the 26th October 2016 was significantly oversubscribed. 

Following Admission on 7th December 2016 a total of 120 million new Ordinary Shares were issued at a price of 105p per share, the Company will have 595,412,613 Ordinary Shares in issue.

Ordinary 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

37.0

Transport

Road

3.32

AP Wireless Infrastructure

GBP

Private

Senior

30.0

TMT

Towers

6.81

IO Data Centers LLC

USD

Private

Senior

30.0

TMT

Data Centers

9.00

Infinis Bridge

GBP

Private

HoldCo

24.0

Renewables

Solar & Wind

10.00

Regard Group Mezzanine

GBP

Private

Mezz

22.6

Accommodation

Health Care

12.03

Natgasoline Senior Unsecured

USD

Private

Mezz

20.0

Other

Industrial Infrastructure

9.78

Exeltium Mezzanine

EUR

Private

Mezz

18.9

Power

PPA

9.14

Danaos Snr Secured 2018

USD

Private

Senior

17.6

Transport assets

Shipping

16.77

Neoen Production

EUR

Private

HoldCo

16.5

Renewables

Solar & Wind

6.99

Mount Signal Solar

USD

Private

Senior

16.0

Renewables

Solar & Wind

8.49

Longview Power TL B

USD

Private

Senior

13.6

Power

Electricity Generation

10.55

GFL 9.875% 2021

USD

Public

Senior

13.0

Utility

Waste

6.34

Talen Energy Supply 4.6% 2021

USD

Public

Senior

13.0

Power

Electricity Generation

8.99

Heathrow Finance PLC

GBP

Public

Senior

11.4

Transport

Airport

4.30

Green Plains TL B

USD

Public

Senior

11.2

Other

Alternative Fuel

7.00

Note (1) - excluding accrued interest

Market Summary

November displayed less activity in the infrastructure debt sector, with only 6 European project finance transactions reaching financial close across the month.

Notable transactions include the partly subsidised €900mm Nord-Pas-de-Calais broadband PPP financing for fibre optic in France. In addition, several small renewables deals closed throughout Europe, including the 30.8MW SunPort Delfzijl Solar Park in the Netherlands and the 33.1MW Castlepook Wind Farm in Ireland.

News flow in November was initially dominated by the election of Donald Trump as the 45th President of the United States, which increased yields on sovereign bonds and heightened uncertainty around global trade.

November news flow ended with RBS emerging as the biggest failure in the UK bank stress tests, and the struggling Italian bank MPS awaiting the reform referendum in early December.

During November, Sterling recovered against both the dollar and euro, ending the month at $1.25 and €1.18 respectively. The Bloomberg USD High Yield Corporate Bond Index remained flat at 167.

 

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 020 7079 0483 / 020 7079 0481

 

Stifel Nicolaus Europe Limited

Neil Winward / Mark Bloomfield / Gaudi Le Roux              Telephone 020 7710 7600

 

International Fund Management Limited

Chris Hickling                                                                Telephone 01481 737600

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).


This information is provided by RNS
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