Sequoia Economic Infra Inc Fd Ld Net Asset Value(s) (6797Q)

TIDMSEQI

RNS Number : 6797Q

Sequoia Economic Infra Inc Fd Ld

14 September 2017

14 September 2017

Sequoia Economic Infrastructure Income Fund Limited

Net Asset Value as at 31 August 2017 and Investment Update

Ordinary Share update

SEQI's NAV increased to 100.81 per share from 100.11 per share on 31st July 2017 which arose primarily through:

   --      Interest income net of expenses of 0.42p; 
   --      An increase of 0.08p in asset valuations; 
   --      An increase of 0.20p from FX movements. 

During August, the Company's investment activities resulted in the total invested portfolio of 75.8% of the Company's NAV, with an additional GBP126.0m either traded but not settled or undrawn commitments. The total amount invested and committed represents 92.5% of the Company's NAV. The Company has gross leverage of GBP40m representing approximately 5.3% of NAV.

The portfolio held 29 private debt investments and 15 infrastructure bonds for a total of 44 investments that covered 8 sectors and 22 subsectors, and are collectively valued at GBP577.7m including accrued interest with an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.1% and a weighted average life across the acquired portfolio of approximately 4.6 years. The weighted average purchase price of the Company's acquired investments was approximately 96.2% of par. Investments with construction risk represent 12% of NAV.

As of the 31st August 2017, approximately 89% of NAV consisted of either Sterling assets or was hedged into Sterling. The Company has adequate resources to cover the cash costs associated with its hedging activities. 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.

Approximately 48% of the invested portfolio comprises floating rate assets, with only two LIBOR floor above current LIBOR levels (EUR). As such, the portfolio's yield is likely to rise over time as LIBOR increases. The Company expects the floating rate proportion to exceed 50% once all outstanding trades have settled.

The Company's settled investment activities during August include:

-- The $15.9m Green Plains term loan B was refinanced, and the Company participated in the refinancing with $18m.

-- An additional drawdown of roughly GBP1.1m to the Clyde Street Glasgow student housing transaction;

-- Sold $15m of the Cheniere Corp Christi 7% 2024 bonds and $15m of GFL Environmental 9.875% 2021 bonds, valued together at GBP26m.

On 30th August it was announced that the Company would be included in the FTSE 250 index, effective from 18th September 2017.

Ordinary Portfolio Summary (15 largest settled investments)

 
 Transaction           Currency        Type    Ranking      Value          Sector        Sub-sector       Yield 
  name                                                    GBPm(1)                                            to 
                                                                                                       maturity 
                                                                                                        / worst 
                                                                                                            (%) 
 
 A'lienor 
  S.A.S. (A65)            EUR       Private     Senior       39.9       Transport              Road        3.45 
                                                                                               Data 
 IO Data Centers          USD      Private      Senior       38.8             TMT           centers        9.00 
 AP Wireless 
  Infrastructure          GBP       Private     Senior       38.0             TMT            Towers        6.25 
 Cory Environmental       GBP      Private      HoldCo       32.7         Utility   Waste-to-energy        8.50 
 Regard Group                                                                                Health 
  Mezzanine               GBP       Private       Mezz       28.6   Accommodation              care       12.12 
                                                                                               Data 
 Abteen Ventures          USD       Private     Senior       27.1             TMT           centers        8.00 
 Hawaiki Mezzanine                                                                         Undersea 
  Loan                    USD       Private       Mezz       23.6             TMT             cable       11.23 
 Exeltium 
  Mezzanine               EUR       Private       Mezz       21.5           Power               PPA       12.39 
                                                                                         Industrial 
 Natgasoline              USD       Private       Mezz       21.4           Other             infra        9.99 
 Welcome Break                                                                             Motorway 
  No.1 Ltd                GBP       Private       Mezz       18.3       Transport          services        8.28 
                                                                                              Solar 
 Neoen Production         EUR       Private     HoldCo       17.4      Renewables            & wind        6.99 
 NGG Finance                                                                            Electricity 
  5.625% 2073             GBP        Public       Mezz       17.1         Utility      Distribution        3.54 
 Global Ship 
  Lease 10%                                                             Transport 
  2019                    USD        Public     Senior       14.3          assets          Shipping       11.40 
 NRG Energy 
  Inc 7.25%                                                                             Electricity 
  2026                    USD        Public     Senior       13.3           Power        Generation        5.87 
 Dulles Greenway 
  2029                    USD        Public     Senior       12.5       Transport              Road        5.21 
 

Note (1) - excluding accrued interest

Market Summary

A total of 43 project finance transactions closed in August throughout the Company's eligible jurisdictions, and were worth, in aggregate, $16.6bn.

Notable transactions include:

-- The EUR1.3bn primary financing of the Deutsche Bucht 252MW Offshore Wind Farm, which will be connected to the larger 800MW BorWin Beta offshore converter station;

-- The EUR900m primary financing of the Grand Est Broadband PPP project in France, which is part of an initiative to roll out fibre broadband to the entire country by 2022;

   --      The additional $92.5m equity bridge loan to Mount Signal 3. 

It was reported in August that the US economy had the strongest quarter since 2015 with 3% GDP growth despite any meaningful policy progress in Washington.

Confidence in the eurozone has risen to the highest level since July 2007. The European Commission's monthly measure of economic sentiment rose to 111.9 in August, which reflects optimism derived particularly from improving domestic consumer spending throughout the eurozone.

During August, both the Euro and US Dollar strengthened against Sterling ending the month at EUR1.0854 and $1.2894 respectively, and the Bloomberg USD High Yield Corporate Bond Index rose slightly to 180.7.

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, 2017 02:01 ET (06:01 GMT)