NAV, Dividend and Investment Update

RNS Number : 8142C

SQN Asset Finance Income Fund Ltd

22 January 2015

 



22 January 2015

SQN Asset Finance Income Fund Limited

Monthly Net Asset Value, Dividend and Investment Update

Net Asset Value

SQN Asset Finance Income Fund Limited (the "Company"), the only diversified equipment leasing fund listed in the UK, is pleased to provide its monthly Net Asset Value ("NAV").

As at 31 December 2014, the Company's unaudited, estimated NAV was 98.92 pence per share (cum-income).

Dividend

The Company is pleased to announce a dividend of 0.92 pence per share for the quarter ended 31 December 2014. In line with the prospectus published in June 2014 (the "Prospectus"), at the time of the initial public offering ("IPO"), the Company will commence monthly dividends from January 2015, with the dividend for the month to 31 January 2015 to be announced in February 2015.

Investment Update

The Company has been active for approximately six months and has approved and/or committed to funding transactions totalling £140.6m, representing approximately 93.7% of the capital raised during the Company's IPO.

To date, the Company has funded approximately £77.0m of investments with the balance being drawn down over the coming months.

The yields being achieved in the portfolio are at a premium to those anticipated at the time of the IPO with longer tenures, more committed cash flows and less reliance on residual values. The Company believes that the continued focus on these higher quality cash flowing transactions will provide longer term benefits to the Company, despite the ramp-up period required in building the portfolio. The average projected cash yield on investments made to date is 9.8% with the transactions in the pipeline expected to maintain the average yield in the portfolio, providing support for the dividend and NAV growth.

Investments in the portfolio are spread over more than 10 different asset classes with transportation equipment being the largest asset class, representing 21.5% of the capital raised, followed by manufacturing equipment and modular buildings. The transportation assets consist of first lien financings of unleveraged marine vessels, a senior interest in a portfolio of helicopters, and ground support equipment for airports.

We have also made investments in assets across agricultural, energy, environmental, material handling, medical, remote operated vehicles, and technology equipment.

The average investment size, excluding the Company's interest in the seasoned portfolios of equipment leases, is in line with expectations at the time of the IPO, averaging approximately £3.7m, as the Company maintains its focus on the sub-£20.0m market, which it believes continues to be underserved.

The Company has 25.4% of capital raised in US dollar denominated investments and 8.8% of capital raised in Euro denominated investments, with the balance of 65.8%, including un-invested cash, in Sterling. As the portfolio develops, it is expected that the dollar and euro positions will increase, however we will continue to hedge these positions, where appropriate.

Manager Update

The Board of the Company has consented to the consolidation of the Summit Asset Management Ltd - Leasing Division (Sub-manager) into SQN Capital Management (UK) Limited as outlined in the Prospectus. There have been no staffing changes as a result of the consolidation and all senior level personnel remain in place.

For further information please contact:

SQN Capital Management, LLC Jeremiah Silkowski Neil Roberts	01932 575 888
Winterflood Securities Limited	020 3100 0000
Joe Winkley Neil Langford
Buchanan Charles Ryland Sophie McNulty Jason Day	020 7466 5000

Notes to Editor

The Company invests in equipment lease and asset finance arrangements across a diverse portfolio of assets and industries predominantly in the UK and US. The Company focuses on business-essential, revenue-producing (or cost saving) equipment and other assets with high in-place value and long economic life relative to the investment term.

The Company's Investment Manager is SQN Capital Management, LLC, a Registered Investment Advisor with the United States Securities and Exchange Commission. The principals responsible for managing the portfolio are Jeremiah Silkowski and Neil Roberts.

 

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