Sequoia Economic Infra Inc Fd Ld NAV and Investment Update (1310F)

TIDMSEQI

RNS Number : 1310F

Sequoia Economic Infra Inc Fd Ld

14 July 2021

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES

14 July 2021

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 103.13 pence per share from the prior month's NAV of 102.41 pence per share, representing an increase of 0.72 pence per share.

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

 
                                   pence per 
                                     share 
---------------------------------  --------- 
May NAV                             102.41 
Interest income, net of expenses     0.66 
FX movements, net of hedges          0.01 
Increase in asset valuations         0.05 
June NAV                            103.13 
=================================  ========= 
 

Portfolio update

The Investment Adviser, the Investment Manager, and PWC, the independent valuation agent, continue their close analysis of the effects of COVID-19 on the Company's portfolio. The Investment Adviser expects the previously identified uplift in valuations of the assets where COVID-19 has impacted performance to continue. This trend is expected to persist as economies continue to recover and lockdowns start to further ease globally.

As at 30 June 2021, the Company had cash of GBP95.5m and had drawn GBP83.9m on its GBP280m Revolving Credit Facility. The Company also had undrawn commitments on existing investments collectively valued at GBP73.5m. The Company's invested portfolio comprised of 64 private debt investments and 11 infrastructure bonds across 8 sectors and 30 sub-sectors. It had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.9% and a cash yield of 5.9%. The weighted average portfolio life is approximately 4.3 years. Private debt investments represented 94% of the total portfolio and 53% of the portfolio comprised floating rate assets. The weighted average purchase price of the Company's investments was 98.9% of par. Investments which are pre-operational represented 13.0% of total assets.

The Company's invested portfolio remains geographically diverse with 48% located across the US, 20% in the UK, 27% in Europe, and 5% 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 is pleased to announce that the last investment in its ESG "run-off" portfolio has repaid during the month. The investment had the lowest ESG score in the portfolio and was placed in the Company's "run-off" portfolio last year, in line with its ESG policy. The Company's ESG profile is expected to improve over time as the portfolio is on a long-term and sustainable upward trend.

On 5 July 2021, the Company published its Annual Report for the year ended 31 March 2021 which is available on its website (see results presentation ). The Board was pleased to announce a total NAV return of 13.5% in the year and an improvement to the portfolio's ESG profile year on year.

The Company's settled investment activities during June include:

-- An AUD 18.0m guarantee facility to Piper Preston Pty Ltd, a Salt Lake Potash mining company in Australia;

-- A EUR16.4m bridge loan to Ventus, a German real estate developer largely leasing its properties to sub-national German government entities with strong credit profiles; and

-- An additional $1.8m disbursement to Kaveh Equity, a leading developer of hyperscale data centres in Ashburn, Virginia.

The following assets sold or prepaid in June:

-- An AUD 75.0m primary holdco loan to Adani Abbot, a coal export terminal located in Queensland, Australia.

Ordinary Portfolio Summary (15 largest settled investments)

 
 Investment name     Currency        Type    Ranking   Value       Sector     Sub-sector   Cash-on-cash          Yield 
                                                        GBPm                                      yield    to maturity 
                                                         (1)                                        (%)        / worst 
                                                                                                                   (%) 
 
                                                                Transport        Rolling 
 Madrid Metro           EUR      Private      HoldCo    65.5       assets          stock           1.30           5.40 
                                                                                Landfill 
 Infinis Energy         GBP      Private      Senior    65.0   Renewables            gas           5.00           5.00 
 AP Wireless                                                                     Telecom 
  Junior                EUR      Private        Mezz    60.6          TMT         towers           4.22           6.12 
 Bulb Senior TL                                                              Electricity 
  2021                  GBP      Private      Senior    54.6      Utility         supply           6.59           7.02 
 Hawaiki Mezzanine                                                              Undersea 
  Loan                  USD      Private        Mezz    54.5          TMT          cable           8.46           9.50 
 Tracy Hills TL                                                              Residential 
  2025                  USD      Private      Senior    53.4        Other          infra           8.10           8.10 
 Hawkeye Solar                                                                     Solar 
  HoldCo                USD      Private      HoldCo    53.4   Renewables         & wind           8.25           8.25 
 AP Wireless US                                                                  Telecom 
  Holdco                USD      Private      HoldCo    50.1          TMT         towers           6.00           6.00 
 Expedient Data 
  Centers               USD      Private      Senior    46.6          TMT   Data centers           5.57           5.75 
 Scandlines 
  Mezzanine 
  2032                  EUR      Private      HoldCo    44.4    Transport        Ferries           7.05           7.99 
 Sacramento Data 
  Centre                USD      Private      Senior    44.1          TMT   Data centers           0.00          11.00 
 Euroports 2nd 
  Lien 2026             EUR      Private        Mezz    43.7    Transport           Port           7.76           7.78 
 Care4U Senior                                                                    Health 
  Secured               EUR      Private      Senior    43.5      Accomm.           care           6.00           6.00 
 Bannister Senior                                                                 Health 
  Secured               GBP      Private      Senior    41.3      Accomm.           care           6.54           6.54 
 Project Camden         EUR      Private      HoldCo    38.7        Power      Base load           7.49           7.48 
 

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

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America. This announcement is not an offer of securities for sale into the United States. The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration. No public offering of securities is being made in the United States.

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

Laura Marshall

   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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July 14, 2021 02:00 ET (06:00 GMT)