Sequoia Economic Infra Inc Fd Ld Net Asset Value(s) 30 November 2016 (7631R)

TIDMSEQI

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 GBP466.6m 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          Currency        Type    Ranking       Value          Sector        Sub-sector       Yield 
  name                                                   GBPmm(1)                                            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                                                                               Data 
  LLC                    USD       Private     Senior        30.0             TMT           Centers        9.00 
                                                                                              Solar 
 Infinis Bridge          GBP       Private     HoldCo        24.0      Renewables            & Wind       10.00 
 Regard Group                                                                                Health 
  Mezzanine              GBP       Private       Mezz        22.6   Accommodation              Care       12.03 
 Natgasoline                                                                             Industrial 
  Senior Unsecured       USD       Private       Mezz        20.0           Other    Infrastructure        9.78 
 Exeltium 
  Mezzanine              EUR       Private       Mezz        18.9           Power               PPA        9.14 
 Danaos Snr                                                             Transport 
  Secured 2018           USD       Private     Senior        17.6          assets          Shipping       16.77 
                                                                                              Solar 
 Neoen Production        EUR       Private     HoldCo        16.5      Renewables            & Wind        6.99 
 Mount Signal                                                                                 Solar 
  Solar                  USD      Private      Senior        16.0      Renewables            & Wind        8.49 
 Longview 
  Power TL                                                                              Electricity 
  B                      USD      Private      Senior        13.6           Power        Generation       10.55 
 GFL 9.875% 
  2021                   USD        Public     Senior        13.0         Utility             Waste        6.34 
 Talen Energy 
  Supply 4.6%                                                                           Electricity 
  2021                   USD        Public     Senior        13.0           Power        Generation        8.99 
 Heathrow 
  Finance PLC            GBP        Public     Senior        11.4       Transport           Airport        4.30 
 Green Plains                                                                           Alternative 
  TL B                   USD        Public     Senior        11.2           Other              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 EUR900mm 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 EUR1.18 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 [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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December 14, 2016 02:00 ET (07:00 GMT)