Sequoia Economic Infrast... Share Discussion Threads

[ukneonboy] 13/7/2020 12:08

Shares in Lieu of Quarterly Cash Dividend
=========================================

Publication of Scrip Dividend Circular

At the EGM of the Company held on 25 February 2020, Shareholders authorised the Directors to offer holders of Ordinary Shares the right to elect to receive Ordinary Shares credited as fully paid, instead of cash in respect of interim dividends declared by the Company until the AGM of the Company to be held in 2022 (the " Scrip Dividend Alternative ").

The Company has posted to Shareholders a Circular setting out the terms of the Scrip Dividend Alternative (the " Circular "). Copies of the Circular have been submitted to the National Storage Mechanism and will be shortly available for inspection at www.morningstar.co.uk/uk/NSM , on the Company's website at hxxps://www.seqifund.com/downloads , or provided on request from the Company Secretary.

For further information please contact:


Sequoia Investment Management
Company
Steve Cook
Dolf Kohnhorst
Randall Sandstrom
Greg Taylor [phone]

[ukneonboy] 13/7/2020 10:26

yep, that's the article

[robow] 13/7/2020 09:39

here it is from the DT

Questor: our ‘lending money to bridges’ fund is doing just what we hoped of it
Questor Income Portfolio: the Sequoia Economic Infrastructure Income portfolio doesn’t expect Covid-19 to blow its dividend off course

By
Richard Evans
10 July 2020 • 6:00am

Several of the recent additions to our Income Portfolio have issued updates in recent weeks. All were bought with the intention to make our income more secure.

Is our strategy working? We’ll cover some of these updates in the coming weeks and will start with the Sequoia Economic Infrastructure Income fund.

This trust, known as Seqi, is unusual in that it makes money from interest on loans advanced to the owners of infrastructure assets such as bridges. As these assets themselves tend to generate stable incomes, the trust’s dividends will, we hope, prove far more reliable than those in other parts of the market, where coronavirus has taken such a toll.

The signs are good. In May last year the trust increased its annual dividend target from 6p to 6.25p a share, and in the annual report for the year to March the board said it expected, in the “absence of any significant restricting factors”, to pay that amount “for the foreseeable future”.

It said it had carried out a “comprehensive portfolio and balance sheet review” in light of “exceptional market volatility arising from the Covid-19 pandemic and oil price collapse”.

Its assessment of cash yields allowed the “reaffirmation of dividend cover and target for the financial year ending March 31 2021”. The actual dividend paid for the past financial year was 6.1875p, which reflects the fact that the target was raised part way through that year.

We are, as always, less concerned about the value of a trust’s assets, which can be expected to wax and wane in a way that we hope dividends will not. The portfolio’s net asset value per share fell from 103.41p to 96.69p over the financial year as a result of the downturn in the financial markets generally, including those markets used by the trust’s independent valuation agents as pricing benchmarks for its assets.

Once dividends were taken into account, the trust’s total return on the basis of net asset value over the year was minus 0.9pc. Although the trust does not expect the pandemic to affect its ability to pay the dividend, it has modified its investment strategy in response to the crisis.

In a move that this column finds reassuring, the board said there had been a “redirection of the investment adviser’s resources from origination to enhanced credit and portfolio monitoring” – in other words, for now it is paying less attention to investing in new loans and more to making sure that its existing ones do not get into trouble.


The managers are keeping at least one eye on possible new holdings for the portfolio, however. While the trust said it had imposed restrictions “on certain new investments”, this was done with a view to “preservation of balance sheet capacity to take advantage of difficult market conditions and opportunities to invest in new loans on attractive terms”.

It explained that “in the current environment there is the possibility that a number of high-quality economic infrastructure investments will appear on the secondary market at attractive prices”. The secondary market is where lenders that originated loans sell them on to other investors.

“As the company slowly ramps up deployment of its cash as the market improves, these opportunities could be a significant source of [outperformance] without sacrificing credit quality,” it added.

Even if we assume that the global economy can recover well from the pandemic there is concern that vastly increased government spending across the world will stoke inflation. We can take comfort from the fact that 70pc of Seqi’s portfolio consists of “floating-rate investments”, which means that it will receive higher rates of interest on its loans if interest rates generally rise.


Another positive development is that the ongoing charges ratio for the year to March was 0.96pc, compared with 1.02pc the previous year. We see this as reasonable in view of the detailed research needed before money is invested in assets of this type.

This trust is doing what we hoped of it and we will hold.

Questor says: hold

Ticker: SEQI

Share price at close: 104p

[ukneonboy] 13/7/2020 09:12

Recently recommended by QUESTOR in the Daily Telegraph citing it's reliable income stream and strong asset backing

[rik shaw] 26/6/2020 07:06

Possible better to link to the Portfolio page which includes the fact sheet and Excel

(Links need to include a capital letter in the http part to work)

[greenslug] 25/6/2020 21:51

Their holdings are available as a Excel spreadsheet download on the website.



I hope the link works.
You'll have to make your own assesment on risk.

[winsome] 25/6/2020 09:05

Thanks for that. They haven't put the June factsheet on their website but it is under the RNS's. I may top up if in a few months time if things look brighter. They'd have to suffer quite a few defaults before the dividend looked unattractive. Can't see that happening. My BBGI and HICL holdings have fared better.

[gateside] 25/6/2020 08:38

There was a new factsheet issued on 12th June.Maybe not low risk then, but it's certainly lower risk than many companies.SEQI make up 3% of my portfolio.

[winsome] 25/6/2020 08:28

Not bad considering. Not entirely low risk as they do still have investments in student accommodation, airports, aviation, motorway services, hospitality, private schools, shipping and ferry service between Germany and Scandanavia which has been impacted by lockdown. Some of these you wouldn't touch as individual investments at the present time but let's hope most of them continue to pay interest.

I'd like to have seen more detail and a breakdown of risk on individual assets. Seqi make up 5% of my portfolio. Also, why no monthly FAQ sheet for June? There was one last year despite being in same month as annual results.

[gateside] 25/6/2020 06:57

Good results. Board expect to pay a 6.25p yield for the foreseeable future. At current price that a 6% yield. What an excellent low risk investment this is.

[gateside] 22/5/2020 19:26

Dividend paid today :-)

[gateside] 23/4/2020 10:08

Ex Dividend today hence the drop

[gateside] 16/4/2020 06:34

Dividend announcement today. Goes ex-dividend next week on 23rd April, paid on 22nd May.

[winsome] 15/4/2020 13:08

We could see 10% losses on their portfolio in the oil and aviation sectors, and then there is their 9% in various corporate bonds, which could take a hit. I'd hope 15% loss on their portfolio would be very worst case over the next 12 months but the current share price more than reflects that already and 12 months of interest on the rest of the portfolio could mitigate that by half.

So I'm holding for long term. Key thing is they have no debt. I'm hoping NAV in 12 months time is no lower than today's.

[gateside] 15/4/2020 12:45

Bought in at start of year for the high yield in a low risk share. Hasn't quite worked out with global events and am sitting on a small loss. But happy to hold and will look at adding.

[zeppo] 15/4/2020 08:16

8w

Thank you!

Now seen RNS.

[8w] 15/4/2020 08:09

Reduction in NAV , see RNS.

Overall statement seems solid, happy to hold.

[zeppo] 15/4/2020 07:42

Why today's retreat?

Any ideas?

[rik shaw] 19/3/2020 16:52

with one letter capitalised the link above should work.

[zeppo] 19/3/2020 08:37

Gateside

Thank you

[gateside] 19/3/2020 07:21

Read the transcript of the investors call. Seemed reassuring to me.

[apollocreed1] 19/3/2020 01:20

Here's the link to the investor's call:

hxxps://www.seqifund.com/investors/investor-call/

[apollocreed1] 19/3/2020 00:57

I can't believe my eyes! But I would speculate the following 2 points which is why it has fallen:

1) Today, supposedly risk-free government bonds sold off around the world as it seems now the world is seriously worried about the solvency of governments or just because investors are so desperate to meet margin calls that they will sell anything to pay their debts - including safe havens. So Sequoia is really an inflation-linked bond fund, and I believe a lot of their loans are to governments, so potentially, the borrowers to whom Sequoia has lent money are governments and are now of riskier credit quality. Now the truth of the matter is that all these governments will just print money to pay any debts they have and even if that causes inflation, SEQI's returns are index-linked so there should not be any problem with this.

2) SQN Secured Income Fund releases a statement yesterday saying "....In recent days, the Company has faced margin calls on its forward foreign exchange hedging as Sterling has weakened notably." SQN therefore decided to close their hedge in order to conserve cash. Now I'm puzzled why in the SEQI conference call the manager didn't even mention the performance of the hedge so it's possible that they lost some money on that.

To paraphrase something Jim Rogers often says, "in a panic, investors always think that the world is ending, but it never ends and there will always be a recovery." I agree and think SEQI at this level is now the best risk-adjusted investment on the market.

[zeppo] 18/3/2020 16:41

Why is SEQI taking a pounding?

Are the dividends safe?