Sequoia Economic Infra Inc Fd Ld Net Asset Value(s) (7238J)

TIDMSEQI

RNS Number : 7238J

Sequoia Economic Infra Inc Fd Ld

14 September 2016

14 September 2016

Sequoia Economic Infrastructure Income Fund Limited

Net Asset Value as at 31 August 2016 and Investment Update

Ordinary Share update

As of the 31st August 2016, the Ordinary share class held 17 private debt investments and 11 infrastructure bonds, collectively valued at GBP292.7m 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 5.1 years.

Approximately 50% of the Ordinary Share portfolio comprises floating rate assets, with only four LIBOR floors, as such the portfolio's yield is likely to increase 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.

The small decrease in the Ordinary Share NAV to 100.44p from 100.78p per share arose primarily through:

   --       Interest income net of expenses of 0.41p; 
   --       A decline of 0.70p in asset valuations; 
   --       A decline of 0.06p in FX movements. 

Ordinary Portfolio Summary (10 largest settled investments)

 
 Transaction         Currency        Type    Ranking       Value       Sector    Sub-sector       Yield 
  name                                                  GBPmm(1)                                     to 
                                                                                               maturity 
                                                                                                / worst 
                                                                                                    (%) 
 
 A'lienor 
  S.A.S. (A65)          EUR       Private     Senior        31.6    Transport          Road        5.25 
                                                                                      Solar 
 Infinis Bridge         GBP       Private     HoldCo        24.0   Renewables        & Wind       10.00 
 Exeltium 
  Mezzanine             EUR       Private       Mezz        19.0        Power           PPA        9.15 
 Danaos Snr                                                         Transport 
  Secured 2018          USD       Private     Senior        17.7       assets      Shipping       13.22 
 Neoen Production                                                                     Solar 
  1 S.A.S.U             EUR       Private     HoldCo        16.6   Renewables        & Wind        6.99 
 IO Data Centers                                                                       Data 
  LLC                   USD      Private      Senior        15.2          TMT       Centres        7.50 
 Biffa TL 
  A                     GBP       Private     Senior        13.0      Utility         Waste        6.51 
 GFL 9.875% 
  2021                  USD        Public     Senior        12.4      Utility         Waste        6.67 
 Green Plains                                                                   Alternative 
  TL B                  USD       Private     Senior        10.9        Other          Fuel        7.52 
 Reliance 
  Rail Finance                                                      Transport       Rolling 
  2018                  AUD       Private     Senior        10.5       assets         Stock        6.84 
 

Note (1) - excluding accrued interest

C Share update

At month end, the C Share class held 7 private debt investments and 2 infrastructure bonds, with one further private debt position in the process of settlement. These assets are collectively valued at GBP118.1m including accrued interest, with an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 9.0% and a weighted average life across the acquired portfolio of approximately 4.1 years.

The investments are geographically diverse and cover the power, aircraft leasing, renewable, utility and health care sectors.

Investments in August include:

   --       Senior unsecured loan to Natgasoline, a methanol production facility in Texas; 
   --       A mezzanine loan to Regard Group, a specialist care home operator in the UK; 
   --       A term loan to an aircraft leasing company. 

The Investment Adviser continues to see attractive opportunities for the deployment of capital in the economic infrastructure debt sector, and expects the overall yield on the C Share portfolio to remain 8% or higher.

The small decrease in the C Share NAV to 98.49p from 98.58p per share arose primarily through:

   --       Interest income net of expenses of 0.37p; 
   --       A decline of 0.42p in FX movements; and 
   --       A decline of 0.06p in asset valuations. 

C-Share Portfolio Summary (all settled investments)

 
 Transaction          Currency        Type    Ranking       Value          Sector        Sub-sector       Yield 
  name                                                   GBPmm(1)                                            to 
                                                                                                       maturity 
                                                                                                        / worst 
                                                                                                            (%) 
 
 AP Wireless 
  Infrastructure         GBP       Private     Senior        27.0             TMT            Towers        6.63 
 Regard Group                                                                                Health 
  Mezzanine              GBP       Private       Mezz        22.5   Accommodation              Care       12.00 
 Natgasoline                                                                             Industrial 
  Senior Unsecured       USD       Private       Mezz        19.2           Other    Infrastructure        9.51 
 Longview 
  Power TL                                                                              Electricity 
  B                      USD       Private     Senior        13.0           Power        Generation       10.60 
 Talen Energy 
  Supply 4.6%                                                                           Electricity 
  2021                   USD        Public     Senior        11.8           Power        Generation        9.88 
 IO Data Centers                                                                               Data 
  LLC                    USD      Private      Senior        11.4             TMT           Centres        7.50 
 Peterborough 
  Progress 
  Health                 GBP        Public     Senior         8.9           Other               PFI        5.88 
 Castlelake                                                             Transport 
  2016-1 C               USD       Private       Mezz         3.0          Assets          Aircraft        8.24 
 DBB Jack-up 
  Services                                                                                Renewable 
  2019                   EUR       Private     Senior         0.5           Other         Equipment        9.38 
 

Note (1) - excluding accrued interest

Market Summary

August was an active month for UK renewables projects during which five projects reached financial close. The largest project to close in August was Tees CHP Biomass Plant (299MW) which secured roughly GBP900m to construct and operate the plant in north-east England.

In August, the Bank of England cut interest rates for the first time since 2009, from 0.50% to 0.25%, in response to Brexit uncertainty.

Sterling remained relatively flat against the US Dollar at $1.32, and fell slightly against the Euro, ending the month at EUR1.18.

During August, the Bloomberg USD High Yield Corporate Bond Index rose from 163 to 166.

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).

This information is provided by RNS

The company news service from the London Stock Exchange

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September 14, 2016 02:01 ET (06:01 GMT)