Sequoia Economic Infra Inc Fd Ld Net Asset Value(s) (8282N)

TIDMSEQI

RNS Number : 8282N

Sequoia Economic Infra Inc Fd Ld

14 August 2017

14 August 2017

Sequoia Economic Infrastructure Income Fund Limited

Net Asset Value as at 31 July 2017 and Investment Update

Ordinary Share update

SEQI's NAV decreased to 100.11 per share from 101.34 per share on 30th June 2017 which arose primarily through:

   --      Interest income net of expenses of 0.40p; 
   --      A decrease of 0.11p in asset valuations; 
   --      A decrease of 0.02p from FX movements; 
   --      A dividend declaration of 1.50p. 

During July, the Company had invested approximately GBP32m, resulting in the total invested portfolio of 79.7% of the Company's NAV, with an additional GBP80.2m either traded but not settled or undrawn commitments. The total amount invested and committed represents 90.5% of the Company's NAV. The Company had gross leverage of GBP40m representing approximately 5.3% of NAV.

The portfolio held 30 private debt investments and 17 infrastructure bonds for a total of 47 investments that covered 8 sectors and 25 subsectors, and are collectively valued at GBP603.2m including accrued interest with an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 7.9% 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 96.8% of par. Investments with construction risk represent 14% of NAV.

As of the 31st July 2017, approximately 88% 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 47% 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 the proceeds of the recent equity issue are deployed.

The Company's investment activities during July include:

-- First drawdown of $30m to Hawaiki, a company that lays broadband cable across the Pacific Ocean to connect Australia, Hawaii, and the US;

-- An additional GBP5m investment to the Regard Group, which manages a care home portfolio;

-- An additional GBP5m investment in AP Wireless, a leading mobile mast site lease investment firm;

   --                  An incremental $5m of Global Ship Lease 10% 2019 bonds; 

-- A scheduled GBP1m drawdown was made to Clyde Street, the Glasgow student housing transaction.

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       38.8       Transport              Road        3.37 
 AP Wireless 
  Infrastructure          GBP       Private     Senior       38.0             TMT            Towers        6.31 
                                                                                               Data 
 IO Data Centers          USD      Private      Senior       37.9             TMT           centers        9.00 
 Cory Environmental       GBP      Private      HoldCo       32.7         Utility   Waste-to-energy        8.50 
 Regard Group                                                                                Health 
  Mezzanine               GBP       Private       Mezz       28.6   Accommodation              care       12.05 
                                                                                               Data 
 Abteen Ventures          USD       Private     Senior       26.5             TMT           centers        8.00 
 Hawaiki Mezzanine                                                                         Undersea 
  Loan                    USD       Private       Mezz       22.7             TMT             cable       11.23 
 Exeltium 
  Mezzanine               EUR       Private       Mezz       20.9           Power               PPA       12.39 
                                                                                         Industrial 
 Natgasoline              USD       Private       Mezz       19.9           Other             infra        9.99 
 Welcome Break                                                                             Motorway 
  No.1 Ltd                GBP       Private       Mezz       18.3       Transport          services        8.29 
 NGG Finance                                                                            Electricity 
  5.625% 2073             GBP        Public       Mezz       17.0         Utility      Distribution        3.58 
                                                                                              Solar 
 Neoen Production         EUR       Private     HoldCo       16.9      Renewables            & wind        7.00 
 Global Ship 
  Lease 10%                                                             Transport 
  2019                    USD        Public     Senior       14.1          assets          Shipping       10.79 
 Cheniere 
  Corp. Christi           USD        Public     Senior       13.0       Transport             Ports        4.42 
 NRG Energy 
  Inc 7.25%                                                                             Electricity 
  2026                    USD        Public     Senior       12.8           Power        Generation        6.21 
 

Note (1) - excluding accrued interest

Market Summary

A total of 21 project finance transactions closed in July throughout the Company's eligible jurisdictions, and were worth, in aggregate, $8.1bn.

Notable transactions include the EUR861m debt refinancing of Scandlines, a German-Danish ferry company that operates short-distance routes, as well as the $530m financing of the 200MW Flat Top wind farm in Texas, of which $309m consisted of debt.

The Federal Reserve kept rates steady in July on the back of conflicting data reflecting low unemployment but also weaker than expected inflation. Janet Yellen suggested that the quantitative easing programme could begin to unwind as soon as the next meeting.

The Eurozone had an active month with the Euro trading at a two-year high against the Dollar, and spreads tightening between Bunds and the debt of periphery countries. Similar to the US, headline inflation in the Eurozone was still below target which the ECB used as evidence to support its dovish views.

During July, Sterling fell against the Euro and continued to strengthen against the Dollar, ending the month at EUR1.1168 and $1.3190 respectively, and the Bloomberg USD High Yield Corporate Bond Index rose slightly to 180.4.

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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August 14, 2017 02:00 ET (06:00 GMT)