Sequoia Economic Infra Inc Fd Ld Net Asset Value(s) (3411W)

TIDMSEQI

RNS Number : 3411W

Sequoia Economic Infra Inc Fd Ld

14 November 2017

14 November 2017

Sequoia Economic Infrastructure Income Fund Limited

Net Asset Value as at 31 October 2017 and Investment Update

Ordinary Share update

SEQI's NAV decreased to 100.75p (ex-dividend) per share from 101.24p (cum dividend) per share on 31 October 2017 which arose primarily through:

   --      Interest income net of expenses of 0.53p; 
   --      An increase of 0.50p in asset valuations; 
   --      A decrease of 0.03p from FX movements; and 
   --      A dividend payable of 1.50p. 

During October, the Company's investment activities resulted in the total invested portfolio of 86.1% of the Company's NAV, with an additional GBP78.9m either traded but not settled or undrawn commitments. The total amount invested and committed represents 96.6% of the Company's NAV. The Company had gross leverage of GBP40m representing c.5.3% of NAV.

The portfolio held 33 private debt investments and 20 infrastructure bonds for a total of 53 investments that covered 8 sectors and 24 subsectors, and are collectively valued at GBP655.8m (incl. accrued interest). The annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) was 7.8% and the acquired portfolio had a weighted average life of approximately 4.7 years. Private debt investments represented 71% of the Company's investments. The weighted average purchase price of the Company's acquired investments was c.94.9% of par. Investments which are pre-operational represent 15.8% of total assets.

As of the 31st October 2017, approximately 92% 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 historically been modest.

Approximately 54% of the invested portfolio comprises floating rate assets, with only two LIBOR floors above current LIBOR levels (EUR). As such, the portfolio's yield is likely to rise over time as LIBOR increases.

The Company's settled investment activities during October include:

   --      A $21.7m direct origination to Sunrun, a residential solar portfolio; and 

-- An incremental GBP5.6m strip of bonds for Theatre (Hospitals) plc, which finances operating hospitals in the UK.

Additionally, the Company sold its $19.3m position of Longview Power and the GBP38.0m investment in AP Wireless repaid in full on its maturity date.

Ordinary Portfolio Summary (15 largest settled investments)

 
 Transaction           Currency        Type    Ranking      Value          Sector        Sub-sector       Yield 
  name                                                    GBPm(1)                                            to 
                                                                                                       maturity 
                                                                                                        / worst 
                                                                                                            (%) 
 
 Hawaiki Mezzanine                                                                         Undersea 
  Loan                    USD       Private       Mezz       38.7             TMT             cable        11.2 
 A'lienor 
  S.A.S. (A65)            EUR       Private     Senior       37.8       Transport              Road         3.1 
                                                                                               Data 
 IO Data Centers          USD      Private      Senior       37.7             TMT           centers         9.0 
 Cory Environmental       GBP      Private      HoldCo       32.7         Utility   Waste-to-energy         8.5 
 Regard Group                                                                                Health 
  Mezzanine               GBP       Private       Mezz       29.0   Accommodation              care        12.1 
                                                                                               Data 
 Abteen Ventures          USD       Private     Senior       26.4             TMT           centers         8.0 
 Warnow Tunnel            EUR       Private     Senior       21.0       Transport              Road         6.8 
                                                                                         Industrial 
 Natgasoline              USD       Private       Mezz       20.8           Other             infra        10.0 
 Exeltium 
  Mezzanine               EUR       Private       Mezz       20.5           Power               PPA        12.4 
 Welcome Break                                                                             Motorway 
  No.1 Ltd                GBP       Private       Mezz       18.3       Transport          services         8.4 
 Terra-Gen 
  Power TL                                                                                    Solar 
  B                       USD       Private     Senior       17.1      Renewables            & Wind         8.0 
 NGG Finance                                                                            Electricity 
  5.625% 2073             GBP        Public       Mezz       17.1         Utility      Distribution         3.5 
                                                                                              Solar 
 Neoen Production         EUR       Private     HoldCo       16.6      Renewables            & wind         7.0 
 Tracy Hills                                                                            Residential 
  TL 2025                 USD       Private     Senior       15.7           Other            Infra.         9.3 
 Global Ship 
  Lease 10%                                                             Transport 
  2019                    USD        Public     Senior       14.5          Assets          Shipping         5.0 
 

Note (1) - excluding accrued interest

Market Summary

A total of 23 project finance transactions closed in October throughout the Company's eligible jurisdictions, and were worth $5.6b in aggregate. Notable transactions during the month include:

-- The EUR83m additional financing of the 27.5MW Slievecallan East and 47MW Ballyhoura onshore wind farms in Ireland;

-- The $208m private placement bond refinancing of the Windsor Essex Parkway project in Ontario, Canada; and

-- The $200 mezzanine debt investment by AMP Capital into Vertical Bridge, the largest private US telecommunications tower infrastructure owner.

In October, estimates of third quarter United States economic growth were at 3%, above the projected 2.5%. The US economy added 261,000 jobs, reducing the unemployment rate to 4.1%. Jerome Powell has been nominated as the new Federal Reserve chairman, but is not anticipated to change the central bank's policies, with an interest raise rise in December still expected.

The eurozone economy has continued to grow, with a 0.6% GDP growth during Q3, giving an annualized growth rate of 2.5%. During October, the Euro weakened and the US Dollar strengthened against Sterling ending the month at EUR1.1405 and $1.3283 respectively, and the Bloomberg USD High Yield Corporate Bond Index rose slightly to 183.2.

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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November 14, 2017 02:01 ET (07:01 GMT)