Sequoia Economic Infrast... Share Discussion Threads

[cocopah] 26/1/2024 08:30

Another 50 days of buybacks at this level and we will have 10% of issued shares held in treasury. At that time a hike in divi to 7p+/p.a. would be well supported. Personally I’d like to see us progress a quarterly dividend of 2p.

[chucko1] 16/1/2024 12:13

My recollection from the previous dividend increase is that there were warm words regarding future increases.

My money is on a circa 5% increase, but that is no more than a personal estimate based upon the above comment.

[speedsgh] 16/1/2024 11:34

"The interest income supports a 10% yield at the current share price." Is another increase in the dividend (currently 6.875p/8.2% annualised) therefore on the cards?

[chucko1] 16/1/2024 09:15

The interest income supports a 10% yield at the current share price. The reduction in rates and gradually increasing fixed income valuation (as seen in this month's NAV upward movement) is icing.

Too easy to buy first off this morning, as though this is not especially on radar screens. The move lower from 85p to 82p over the past week was an open invitation given this update.

[gateside] 16/1/2024 08:24

The NAV per share for SEQI, increased to 94.41 pence per share from the prior month's NAV per share of 92.89 pence, an increase of 1.52 pence per share, underpinned by steady interest income and increases in asset valuations in the month of December.

[mpage] 11/1/2024 09:50

I did read the Winterflood list. In my opinion - based on comments made in Money Makers IT podcasts - E Bird is not THAT experienced and the list(obviously) has a clear bias to W's own clients.

If you're looking for an investment trust analyst who knows 'what's what' then Colette Ord at Numis is hard to beat.

As you all know, in October SEQI turned to using an interest rate swap (7 years) to lock in high rates (at what it hopes is the interest rate peak) to overcome the rule stating it needs to hold 50% in floating rates/index-linked debt. Floating rate loans do help to dampen the volatility of NAV.

DORE is younger, smaller, more volatile, trades at a 25% discount (hence the plug)and has a much lower yield than SEQI. The underlying assets are not really comparable - around two-thirds equity (compared to all private debt) invested in a narrow range of assets, mainly solar + hydro. Greencoat UK Wind looks a better bet than DORE for anyone wanting inflation-linked income.

[cocopah] 11/1/2024 06:13

Not sure how much this will interfere with the share price recovery.⬇5039;

Winterflood Analyst recommendations list …

Infrastructure & Renewable Energy Infrastructure

There was just one change in the infrastructure and renewables sector, as Sequoia Economic Infrastructure Income (SEQI) was removed in favour of Downing Renewables & Infrastructure (DORE).

Sequoia was added last year due to the ‘considerable floating rate exposure in its portfolio’, which Bird felt made it well placed to ‘capture short-term rate rises’ but that opportunity has ‘now largely played out’.

[cocopah] 06/1/2024 10:31

Looks like we need to start the buybacks again now the share price has drifted below the BoD’s recent personal investments … I’m all for it btw! 😎😜🤞🏻

[cocopah] 28/12/2023 19:48

Looks like the net impact of Clyde St will not be negative to NAV … and … given the BOD have lots of skin in the game I would imagine the share buyback will continue apace IF the share price dips below 85p. 🤷‍♂;️⬇5039;

[catch007] 19/12/2023 17:05

Virgin Hotel Glasgow Closes


The decision for Virgin Hotels Glasgow comes just a week after The Scotsman reported the owners of the building had entered an administration process


Virgin Hotels Glasgow closes with immediate effect - four months after opening - as staff escorted from building

Virgin’s premier hotel in Glasgow is set to shut with immediate effect – just four months after first opening.

Staff were told in a morning meeting on Tuesday before being escorted from the building.

The 242-bedroom hotel on the Broomielaw was due to close for trading on Tuesday. The move comes less than a week since The Scotsman first reported that Lloyds Development Limited – the company that owns the landmark building – has entered an administration process.

Staff told The Scotsman they were left surprised and shocked when the announcement was made.
On November 14, a Virgin Hotels spokesperson had told this newspaper: “We can confirm an administration process has started for Lloyds Development Limited, the current owner of Virgin Hotels Glasgow. Geoff Jacobs and Blair Nimmo of Interpath Advisory have been appointed as interim managers of Lloyds Development Limited. It is, however, very much business as usual for the hotel and our team, and we look forward to continuing to welcome guests and build on the hotel’s success.”


A statement released by union Unite Hospitality on X on Tuesday reads: "Our members at Virgin Hotels Glasgow have just been informed that the hotel is to close with immediate effect six days before Christmas.

"The CEO flew in from the US, but couldn’t even answer whether workers will get paid for hours worked."

Virgin Group had on Monday made an approach to buy Virgin Hotels Glasgow from the owner, Lloyds Development Limited, as part of the administration process.

It is understood the company was told the lender was choosing to pursue a sales process in the hope of getting a better offer and that will have an impact on employees, suppliers and guests. Each Virgin hotel is owned independently and operated under a hotel management agreement.

The company that owns the hotel building is part of a limited liability partnership of four designated members.

They are Richard Diamond and Rishipal Singh alongside Lloyds Development Ltd with a registered address in Guernsey and Moreply Ltd, registered in London. All four partners were appointed on 18 May 2017. The partnership was placed into administration on 30 November with interim managers appointed to the company that owns the Glasgow hotel building.

A spokesperson for the joint interim managers said: “Blair Nimmo and Geoff Jacobs of Interpath Advisory were appointed on December 1, 2023 as Insolvency Practitioners to Lloyds Developments Limited, which owns the property located at 246 Clyde Street in Glasgow. They have not been involved with the trading of the hotel at this address. The interim managers are disappointed for everyone involved with the insolvency.”

Virgin Hotels Glasgow was initially scheduled to launch in summer 2022 before being delayed until December last year, then eventually opening the lower floors and welcoming guests to some of the projected 242 bedrooms in August. The upper floors and suites of the hotel were not complete when the hotel opened.

Virgin Group said last week the property had performed as expected since opening.

[scburbs] 05/12/2023 08:11

Worse than that I assume they have refused to put in sufficient money to keep the company afloat (let alone pay back existing debts). Probably means the equity is well out of the money, not sure if it’s SEQI next in line (to take a loss) or if there are junior lenders as well (probably SEQI next in line). Any ideas what the name of the owning company is?

Also not clear how they are going to secure working capital funding. Presumably either this will need to come from SEQI or they will need super senior funding ranking ahead of SEQI. I am guessing the latter.

[winsome] 04/12/2023 21:12

I assume the hotel in question is the new Virgin Hotel Group one. If so its a shame Branson cannot honour his debts

[cocopah] 04/12/2023 12:38

Interesting RNS this morning. Looks like we are going to get out of the Bulb mess losing only £5m. Of course that assumes that the investment in the technology also pays off. I would imagine this must have a positive impact on the next NAV update.

On the other hand, it looks as if there will be a mitigating negative impact from Clyde St although I do believe that the company will also turn this around.

Let’s hope that the two contrasting pieces of news balance each other out, or perhaps work in our favour.

The continuation of the significant buyback is also good news.

[speedsgh] 29/11/2023 20:20

Analysts flag high-yielding debt fund Sequoia as a peak rates winner -

[cocopah] 26/11/2023 00:03

I registered for the investor call and was pleased to be able to listen in at a later date. I remain impressed by the professionalism and dedication to shareholder interests exhibited by the board.

The Q&A session was brief, indeed, the first three questions were submitted by me a few days before the event.

I’m pleased to see that it looks as though we will have good news on the Bulb front in the immediate future and that a positive resolution of the educational facility is forecast.

I would like to see the dividend at least 7p but understand that it’s much better to continue with the excellent share buyback program whilst the discount to NAV remains. Locking in the benefit of current high interest rates will also provide a tailwind to the share price and returns.

This is by far my biggest individual holding and I remain confident. In fact I’m likely to add in next year’s ISA.

As always DYOR 👍🏻😎

[nickelmer] 24/11/2023 11:53

Listened in to the conference call, these guys seem to be very solid, very happy to stay with these for the long term

[gateside] 24/11/2023 07:26

At first glance, results look solid.

[speedsgh] 15/11/2023 10:33

NAV and investment update -

The NAV per share for SEQI, the specialist investor in economic infrastructure debt, increased to 91.84 pence per share from the prior month's NAV per share of 91.16 pence, (being the 29 September 2023 cum-income NAV of 92.88 less the dividend of 1.71875 pence per share declared in respect of the quarter ended 29 September 2023 and payable on 24 November 2023), representing an increase of 0.68 pence per share...

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New £56m private bilateral loan

The Investment Adviser is pleased to announce the arranging of a £56m private bilateral facility to finance the acquisition of the entire issued share capital of Esken Renewables by the sustainable infrastructure fund, Pioneer Infrastructure Partners SCSp, managed by Pioneer Point Partners LLP. The proposed transaction with Esken, the listed aviation and renewable energy group, represents an enterprise value of £107.7m and is conditional inter alia on shareholder approval. The transaction is expected to complete in early December 2023...

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Portfolio update

The Company is attractively positioned from a liquidity perspective with cash of £130.0m available, compared to undrawn commitments on investments of £90.9m (including Esken Renewables). The Company is currently not geared and its revolving credit facility is undrawn, resulting in additional capacity to manage liquidity. The Company also has an active pipeline of new investments with attractive yields in the current interest rate environment and can access its revolving credit facility to manage the misalignment of investment and repayment timings, while prudently balancing its capital allocation between new investment opportunities and share buybacks. The pipeline is diversified by sector, sub-sector, and jurisdiction, with yields currently ranging from 9% to 11%, as evidenced by the new private bilateral loan with Esken.

The Company's invested portfolio consisted of 53 private debt investments and 3 infrastructure bonds across 8 sectors and 26 sub-sectors. It had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 10.9% and a cash yield of 7.5% (excluding cash returns on market-to-market fund holding, deposit accounts and investments rated lower than single C). The weighted average portfolio life remains short and is approximately 3.5 years. Private debt investments represented 97.4% of the total portfolio. The Company's invested portfolio currently consists of 48.9% floating rate investments and remains geographically diverse with 51.9% located across the USA, 25.8% in the UK, 22.2% in Europe, and 0.1% in Australia/New Zealand...

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Non-performing loans

The Investment Adviser continues to actively manage its non-performing loans with the loans being independently marked to market by PwC as part of the monthly valuation process. Further updates will be provided to shareholders in the future when material developments occur...

[gemlotte55] 23/10/2023 18:25

Couple of directors buys today.

[cocopah] 18/10/2023 17:03

Interesting article from Citywire Investment Trust Insider:

Sequoia Economic Infrastructure Income manager Steve Cook is looking for more ‘dynamic management’ of the company’s fixed rate exposure.

High-yielding Sequoia Economic Infrastructure Income (SEQI) is hoping to make its portfolio ‘more dynamic’ by exploring interest rate swaps.

In a trading update, the £1.2bn infrastructure debt trust reported a marginal decline in its net asset value (NAV) of 0.1p to 92.88p per share as interest income was offset by asset valuations.

The 8.7% yielding company is hoping to secure higher rates as it anticipates that central banks are near the end of their rate hike cycle.

Cook is considering the use of interest rate swaps, contracts that usually involve exchanging a fixed interest rate for a floating rate and vice versa.

The manager said the implementation of ‘selectiveR17; swaps would ‘lock in the current high rates being paid by borrowers’ and ‘allow more dynamic management of the portfolio’s fixed rate exposure’.

Matthew Hose, analyst at Jefferies, said the swaps would ‘presumably217; allow the company to have a higher number of holdings with fixed payments than the current investment restriction, which requires at least 50% of the portfolio to be floating rate or inflation-linked debt.

According to the September factsheet, 54.4% of its debt was floating, with the remainder fixed.

The portfolio of private loans and bonds has grown its portfolio 6.7% over the past 12 months, although the shares are up just 1.8%, leaving it trading at a discount of 15.7%, according to Numis.

The fund has been consistently buying back shares to narrow the discount and Sequoia Investment Management’s Steve Cook believes a ‘pull-to-par effect’ – the movement of a bond’s price towards its face value as it nears its maturity date – will also help boost their value. The company estimates it will add approximately 4.3p per share as investments mature.

The portfolio is invested in 53 private debt investments and four infrastructure bonds across eight sectors. Cook said it is ‘attractively positioned from a liquidity perspective’ with cash of £142m and only £29.5m in commitments on existing investments. It has zero gearing and its revolving credit facility (RCF) is undrawn.

Cook said he may look to draw on the RCF to execute the company’s ‘active pipeline of new investments with attractive yields on the current interest rate environment’. The investments in the pipeline are offering yields ranging from 9% to 11%.

[cocopah] 14/10/2023 08:06

Not sure of the rational behind reinstating the DRIP … we are currently soaking up shares to support the stock price and divi cover is good. Seems like one step forwards and two back IMHO. 🤷‍a94;️🤔

On the Bulb front £10m was initially recovered … but not sure about the rest … think it was £40m (some of which will be accounted for by the transfer of the technology - though it remains to be seen if that was a wise trade-off).

[my retirement fund] 06/10/2023 22:21

52p in the pound was mooted but never confirmed

[williamcooper104] 06/10/2023 19:32

Nope can't remember exactly but it wasn't a zero - think they got something like 40 percent cash recovery plus equity in the tech business

[scburbs] 06/10/2023 16:28

Its seems that Zoa started by providing the transitional services to Bulb/Octopus so initially had substantial turnover and profitability and were sitting on £9m cash as at 31 March 2023 so they have resources to continue for a while (albeit resources which could have gone into repaying part of the Bulb loan).

[scburbs] 06/10/2023 15:58

A team of 80 isn't cheap so they either need customers or other investors pretty fast.

"He believes that at least some of Bulb can still make an impact on the energy market. Zoa's team of 80 is mainly made up of staff from the old tech team at Bulb."