Sequoia Economic Infra Inc Fd Ld Net Asset Value(s) (8056E)

TIDMSEQI

RNS Number : 8056E

Sequoia Economic Infra Inc Fd Ld

14 February 2018

14 February 2018

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Company")

Net Asset Value as at 31 January 2018 and Investment Update

Ordinary Share update

The NAV for SEQI, the specialist investor in economic infrastructure debt, increased to 101.04p per share from 100.31p (ex-dividend) per share on 29 December 2017 which arose primarily through:

   --      Interest income net of expenses of 0.60p; 
   --      An increase of 0.29p in asset valuations; 
   --      A decrease of 0.16p from FX movements. 

The Company's invested portfolio represented 87.1% of the Company's NAV, with an additional GBP79.6m either traded but not settled or undrawn commitments. The total portfolio, including both acquired assets and assets which the Company has committed to buy but remain unsettled or undrawn, represented 97.6% of the Company's NAV.

The total portfolio comprised a total of 54 investments collectively valued at GBP745.1m (including accrued interest): 34 private debt investments and 20 infrastructure bonds across 8 sectors and 23 subsectors.

The total portfolio had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 7.9% and a weighted average life of approximately 5.2 years. Private debt investments represented 75% of the total portfolio and 61% of it comprised floating rate assets. The weighted average purchase price of the Company's investments was c.95.3% of par.

Investments which are pre-operational represented 15.9% of total assets.

As at 31 January 2018, approximately 93% 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.

The Company's settled investment activities during January include:

-- A GBP36.0m primary loan to Active Assistance, provides specialised health care throughout the UK;

-- An additional $27.0m disbursement to Tracy Hills, the residential infrastructure project in Northern California;

-- An additional $7.4m loan to Terra-Gen, a renewable energy company focused on utility-scale wind, solar and geothermal generation;

   --      An additional EUR4.8m disbursement to Project Warsaw, a portfolio of wind farms in Poland; 
   --      Primary participations of $2.0m and $5.0m of Apollo Aviation 2018-1B and 2018-1C; 

-- An additional GBP1.1m disbursement to the Clyde Street Student Housing development in Glasgow.

Lastly, three investments repaid during the month of January in line with the Company's expectations:

   --      IO Data Centres which prepaid its amount due in full equal to $50.0m; 
   --      The Regard Mezzanine and HoldCo healthcare loans worth GBP24.4m; and 
   --      The $11.2m of All Aboard Florida bonds were also called. 

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       39.2    Transport             Roads         5.5(2) 
 Hawaiki Mezzanine                                                                      Undersea 
  Loan                    USD       Private       Mezz       37.3          TMT             Cable           11.6 
 Active Assistance                                                                        Health 
  Group                   GBP       Private     Senior       36.4      Accomm.              Care            8.4 
 Tracy Hills                                                                         Residential 
  TL 2025                 USD       Private     Senior       33.8        Other    Infrastructure            9.7 
 Cory Environmental       GBP       Private     HoldCo       31.3      Utility   Waste-to-energy            8.5 
                                                                                           Water 
 Aquaventure              USD       Private     Senior       24.7      Utility           & Waste            7.7 
 Abteen Ventures          USD       Private     Senior       24.7          TMT      Data Centers            8.0 
 Warnow Tunnel            EUR       Private     Senior       20.7    Transport             Roads            6.8 
 Terra-Gen 
  Power TL                                                                                 Solar 
  B                       USD       Private     Senior       20.3   Renewables            & Wind            9.4 
                                                                                      Industrial 
 NatGasoline              USD       Private       Mezz       19.4        Other             Infra           10.0 
 Exeltium 
  Mezzanine               EUR       Private       Mezz       19.3        Power               PPA            9.4 
 Welcome Break                                                                          Motorway 
  No.1 Ltd                GBP       Private       Mezz       18.3    Transport          Services            8.5 
 Bulb Energy                                                                         Electricity 
  Senior Secured          GBP       Private     Senior       17.7      Utility            Supply            9.0 
 NGG Finance                                                                               Elec. 
  5.625% 2073             GBP        Public       Mezz       17.1      Utility      Distribution            3.4 
                                                                                           Solar 
 Neoen Production         EUR       Private     HoldCo       15.3   Renewables            & Wind            7.0 
 

Note (1) - excluding accrued interest

Note (2) - Yield-to-date of expected refinancing;

Market Summary

A total of 27 project finance transactions closed in January throughout the Company's eligible jurisdictions, worth $7.4bn in aggregate. Notable transactions during the month include:

-- A CAD $411m primary financing of development of a new patient care tower in Michael Garron Hospital in Toronto;

   --      A GBP40m term loan for the construction of new student housing in Birmingham; 

-- A EUR164m PPP contract given by the City of Cologne to refurbish and expand four schools; and

-- The EUR135m refinancing of Lestenergia's 144MW Portuguese wind portfolio, designed to pay back existing debt and improve the company's liquidity position.

The equity markets experienced extreme volatility in February, with US VIX more than doubling and the Dow falling 10%. This was triggered by inflationary fears, increasing the risk of the Fed raising rates faster than expected. Equity price weakness has not, however, spilled over to the credit markets with the US CDX high yield index falling by only 1.8% during the same period. Moreover, we have not noticed any material drop in our asset values, as infrastructure debt has a low correlation to the market and is defensive in nature.

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

   Stifel Nicolaus Europe Limited                                                [phone] 

Neil Winward

Mark Bloomfield

Gaudi Le Roux

   Tulchan Communications (Financial PR)                                 [phone] 

James Macey White

Martin Pengelley

Elizabeth Snow

   Praxis Fund Services Limited (Company Secretary)               [phone] 

Shona Darling

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.

This information is provided by RNS

The company news service from the London Stock Exchange

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February 14, 2018 02:00 ET (07:00 GMT)