Sequoia Economic Infra Inc Fd Ld Net Asset Value(s) and Investment Update (7497M)

TIDMSEQI

RNS Number : 7497M

Sequoia Economic Infra Inc Fd Ld

18 October 2016

18 October 2016

Sequoia Economic Infrastructure Income Fund Limited

Net Asset Value as at 30 September 2016 and Investment Update

Ordinary Share update

As of the 30th September 2016, the Ordinary share class held 17 private debt investments and 11 infrastructure bonds, collectively valued at GBP300.4m including accrued interest, with an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.3% and a weighted average life across the acquired portfolio of approximately 5.1 years.

Approximately 52% 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.

The increase in the Ordinary Share NAV (cum dividend) to 101.29p from 100.44p per share arose primarily through:

   --       Interest income net of expenses of 0.43p; 
   --       A decline of 0.07p in asset valuations; and 
   --       An increase of 0.49p 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        32.6    Transport         Road        4.96 
                                                                                     Solar 
 Infinis Bridge         GBP       Private     HoldCo        24.0   Renewables       & Wind       10.00 
 Exeltium 
  Mezzanine             EUR       Private       Mezz        19.3        Power          PPA        9.14 
 Danaos Snr                                                         Transport 
  Secured 2018          USD       Private     Senior        17.1       assets     Shipping       16.44 
 Neoen Production                                                                    Solar 
  1 S.A.S.U             EUR       Private     HoldCo        16.9   Renewables       & Wind        6.99 
 IO Data Centers                                                                      Data 
  LLC                   USD      Private      Senior        15.4          TMT      Centres        7.50 
 Biffa TL 
  A                     GBP       Private     Senior        13.1      Utility        Waste        5.90 
 GFL 9.875% 
  2021                  USD        Public     Senior        12.7      Utility        Waste        6.01 
 Reliance 
  Rail Finance                                                      Transport      Rolling 
  2018                  USD       Private     Senior        11.1       assets        Stock        5.96 
 Green Plains 
  TL B                  USD        Public     Senior        11.0    Transport        Roads        7.38 
 

Note (1) - excluding accrued interest

C Share update

As of the 30th September 2016, the C Share class held 8 private debt investments and 2 infrastructure bonds, with one further private debt position settled, but remains undrawn. Including undrawn assets the C share class was 93.2% invested as at 30 September 2016.

These assets are collectively valued at GBP133.7m 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 3.6 years.

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

Investments in September include a senior secured bridge loan to fund the acquisition of two renewable projects from SunEdison through a private sale process.

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 C Share Conversion Ratio will be announced alongside the September monthly NAV and Conversion will be effective as at 1 November 2016.

The increase in the C Share NAV (cum dividend) to 99.21p from 98.49p per share arose primarily through:

   --       Interest income net of expenses of 0.26p; 
   --       An increase of 0.18p in asset valuations; and 
   --       An increase of 0.27p in FX movements. 

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        22.6   Accommodation              Care       12.00 
 Natgasoline                                                                             Industrial 
  Senior Unsecured       USD       Private       Mezz        19.5           Other    Infrastructure        9.51 
                                                                                              Solar 
 Mount Signal            USD       Private     Senior        14.9      Renewables            & Wind        8.49 
 Longview 
  Power TL                                                                              Electricity 
  B                      USD       Private     Senior        13.2           Power        Generation       10.40 
 IO Data Centers                                                                               Data 
  LLC                    USD      Private      Senior        11.6             TMT           Centres        7.50 
 Talen Energy 
  Supply 4.6%                                                                           Electricity 
  2021                   USD        Public     Senior        11.3           Power        Generation       11.11 
 Peterborough 
  Progress 
  Health                 GBP        Public     Senior         9.0           Other               PFI        5.73 
 Castlelake                                                             Transport 
  2016-1 C               USD       Private       Mezz         3.0          Assets          Aircraft        8.37 
 DBB Jack-up 
  Services                                                                                Renewable 
  2019                   EUR       Private     Senior         0.5           Other         Equipment         9.6 
 

Note (1) - excluding accrued interest

Market Summary

September was another active month for European renewable projects with the 309MW Rentel Offshore Wind Farm in Belgium reaching financial close with EUR850m of debt and EUR250m of equity.

Sterling fell sharply against the US Dollar at $1.29, and fell slightly against the Euro, ending the month at EUR1.15.

During September, the Bloomberg USD High Yield Corporate Bond Index rose slightly from 166 to 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 [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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October 18, 2016 02:00 ET (06:00 GMT)