Sequoia Economic Infra Inc Fd Ld NAV and Investment Update (8088Y)

TIDMSEQI

RNS Number : 8088Y

Sequoia Economic Infra Inc Fd Ld

14 September 2020

14 September 2020

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Company")

NAV update

The NAV for SEQI, the specialist investor in economic infrastructure debt, increased to 98.98 pence per share from the prior month's NAV of 98.02 pence per share, representing an increase of 0.96 pence per share.

The gain in asset valuations can be attributed primarily by spread tightening of comparable investments across the portfolio and continued positive credit developments in the wake of the ongoing COVID-19 pandemic.

A full attribution of the changes in the NAV per share is as follows:

 
                                   pence per 
                                     share 
---------------------------------  --------- 
July NAV                             98.02 
Interest income, net of expenses     0.54 
FX movements, net of hedges          0.03 
Increase in asset valuations         0.39 
August NAV                           98.98 
=================================  ========= 
 

Update on the effects of COVID-19 on the Portfolio

The Investment Adviser, the Investment Manager, and PWC, the independent valuation agent have continued analysing the effect of COVID-19 on the Company's portfolio which also includes a market benchmarking exercise to conclude on spread and yield adjustments for each of the investments.

In summary, the spread widening across the portfolio during the second half of March 2020 continued its reversal throughout August, with several of the Company's investments performing better than expectations throughout the lockdown. The spread tightening seen in the markets and the broader credit outperformance contributed to another market movements gain this month of 0.39 pence per share.

Further Portfolio update

As at 28 August 2020, the Company had cash of GBP94.2m and had drawn GBP80.1m on its GBP280m Revolving Credit Facility. The Company also had undrawn commitments on existing investments collectively valued at GBP59.7m. As of 28 August 2020, the Company's invested portfolio comprised of 62 private debt investments and 12 infrastructure bonds across 8 sectors and 28 sub-sectors. It had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 10.1% and a weighted average life of approximately 5.5 years. Private debt investments represented 94% of the total portfolio and 63% of the portfolio comprised floating rate assets. The weighted average purchase price of the Company's investments was 96.7% of par. Investments which are pre-operational represented 11.2% of total assets.

The Company's invested portfolio remains geographically diverse with 52% located across the US, 16% in the UK, 26% in Europe, and 6% in Australia/New Zealand. Currently the Company is not investing in Portugal or Italy but has selectively invested in opportunities in Spain. The Company's pipeline of economic infrastructure debt investments remains strong and is diversified by sector, sub-sector, and jurisdiction.

At month end, approximately 100% of the Company's NAV consisted of either Sterling assets or was hedged into Sterling. The Company has adequate resources to cover margin calls on its hedging book.

The Company's settled investment activities during August include:

-- An additional $0.9m loan to Bourzou Equity, a company created for a data centre in Virginia.

None of the Company's investments were sold or prepaid in August.

Ordinary Portfolio Summary (15 largest settled investments)

 
 Investment name         Currency        Type    Ranking   Value       Sector         Sub-sector          Yield 
                                                            GBPm                                    to maturity 
                                                             (1)                                        / worst 
                                                                                                            (%) 
 
 AP Wireless Junior         EUR      Private        Mezz    61.5          TMT     Telecom towers            6.2 
 Hawaiki Mezzanine                                                                      Undersea 
  Loan                      USD      Private        Mezz    50.7          TMT              cable           15.0 
 Expedient Data 
  Centers Senior 
  Secured                   USD      Private      Senior    48.2          TMT       Data centers            5.9 
 Scandlines Mezzanine 
  2032                      EUR      Private      HoldCo    43.8    Transport            Ferries            7.4 
 Euroports 2nd 
  Lien 2026                 EUR      Private        Mezz    43.4    Transport               Port            8.7 
 Terra-Gen Power 
  TL B                      USD      Private      Senior    43.2   Renewables       Solar & wind            7.3 
 Bannister Senior 
  Secured                   GBP      Private      Senior    41.6      Accomm.        Health care            7.6 
 Hawkeye Solar 
  HoldCo 2030 1, 
  2, and 3                  USD      Private      HoldCo    41.2   Renewables       Solar & wind            8.2 
 Adani Abbot HoldCo 
  2021                      AUD      Private      HoldCo    40.9    Transport               Port           12.9 
 Bizkaia TL 2021            EUR      Private      HoldCo    40.8        Power   Elec. generation            8.7 
 Jetpeaks HoldCo 
  2027                      USD      Private      HoldCo    40.0        Power   Elec. generation            7.8 
 Tracy Hills TL                                                                      Residential 
  2025                      USD      Private      Senior    40.0        Other              infra            8.5 
 GenOn Bowline 
  Senior Secured 
  2026                      USD      Private      Senior    37.5        Power   Elec. generation            8.0 
 Warnow Tunnel              EUR      Private      Senior    37.2    Transport               Road            8.5 
 Corral HoldCo 
  2024                      USD      Private      HoldCo    35.7        Other           Refinery           11.2 
 

Note (1) - excluding accrued interest

The Company's monthly investor report and additional portfolio disclosure will be made available at http://www.seqifund.com/ .

LEI: 2138006OW12FQHJ6PX91

For further information please contact:

   Sequoia Investment Management Company                              [phone] 

Steve Cook

Dolf Kohnhorst

Randall Sandstrom

Greg Taylor

Anurag Gupta

Jefferies International Limited [phone]

Gaudi le Roux

Neil Winward

   Tulchan Communications (Financial PR)                                    [phone] 

Martin Pengelley

Elizabeth Snow

Deborah Roney

   Praxis Fund Services Limited (Company Secretary)               [phone] 

Matt Falla

Katrina Rowe

About Sequoia Economic Infrastructure Income Fund Limited

The Company 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.

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September 14, 2020 02:00 ET (06:00 GMT)