Sequoia Economic Infra Inc Fd Ld Net Asset Value(s) (6116H)

TIDMSEQI

RNS Number : 6116H

Sequoia Economic Infra Inc Fd Ld

14 March 2018

14 March 2018

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Company")

Net Asset Value as at 28 February 2018 and Investment Update

Ordinary Share update

The NAV for SEQI, the specialist investor in economic infrastructure debt, increased to 101.46p per share from 101.04p per share on 31 January 2018 which arose primarily through:

   --      Interest income net of expenses of 0.62p; 
   --      An decrease of 0.37p in asset valuations; 
   --      A decrease of 0.17p from FX movements. 

The Company's invested portfolio represented 91.5% of the Company's NAV, with an additional GBP62.0m 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 99.6% of the Company's NAV. The Company had gross leverage of GBP21.8m, representing c. 2.9% of NAV.

The total portfolio comprised a total of 58 investments collectively valued at GBP762.6m (including accrued interest): 37 private debt investments and 21 infrastructure bonds across 8 sectors and 23 subsectors.

The invested portfolio had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.0% and a weighted average life of approximately 5.3 years. Private debt investments represented 76% of the total portfolio and 61% of it comprised floating rate assets. The weighted average purchase price of the Company's investments was c.95.1% of par. Investments which are pre-operational represented 16.6% of total assets.

The Company continues to view the US as a strategic target for economic infrastructure assets, with 41% of the invested portfolio consisting of investments located in the US as at 28 February 2018. The other represented regions include the UK, Europe, and Australia/New Zealand, comprising 28%, 24%, and 7% of the invested portfolio, respectively.

As at 28 February 2018, approximately 91% 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 February include:

-- A EUR13.7m primary loan to Hatch Copley Ltd for the acquisition and refurbishment of an Irish student accommodation building;

   --      A final EUR5.0m disbursement to Project Warsaw, the Polish solar PV plants; 

-- A EUR5.9m secondary purchase of Warnow Tunnel, a tunnel linking East and West Rostock, Germany;

   --      A $8.6m secondary purchase of the Talen Energy Supply 10.5% 2026 bonds; 

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       39.6    Transport             Roads            4.7 
 Hawaiki Mezzanine                                                                      Undersea 
  Loan                    USD       Private       Mezz       38.7          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       34.7        Other    Infrastructure            9.7 
 Cory Environmental       GBP       Private     HoldCo       31.3      Utility   Waste-to-energy            8.5 
 Aquaventure              USD       Private     Senior       25.4      Utility             Water            7.7 
 Abteen Ventures          USD       Private     Senior       25.4          TMT      Data Centers            8.0 
 Warnow Tunnel            EUR       Private     Senior       25.2    Transport              Road            6.8 
                                                                                      Industrial 
 NatGasoline              USD       Private       Mezz       21.0        Other             Infra           10.0 
 Terra-Gen 
  Power TL                                                                                 Solar 
  B                       USD       Private     Senior       20.9   Renewables            & Wind            9.4 
 Exeltium 
  Mezzanine               EUR       Private       Mezz       19.5        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       16.8      Utility      Distribution            3.6 
 Clyde Street                                                                            Student 
  Glasgow                 GBP       Private     Senior       16.0      Accomm.           Housing            8.0 
 

Note (1) - excluding accrued interest

Market Summary

A total of 32 project finance transactions closed in February throughout the Company's eligible jurisdictions, worth $5.9bn in aggregate. Notable transactions during the month include:

-- A GBP72m primary financing of the expansion of InterGen's gas-fired Spalding CCGT Project in Lincolnshire;

-- A EUR650m financing for the expansion and reconstruction of the A10/A24 Neuruppin-Pankow Highway in Germany;

-- A $143m refinancing of Longroad Energy's US Solar portfolio consisting of over 300 operating solar facilities; and

   --      The CAD$150m debt funding for Innergex's CAD $1.1 acquisition of Alterra Power. 

In February, Q4 2017 US GDP growth was revised slightly downwards to 2.5%, for a full-year 2017 GDP growth rate of 2.3%. The US Federal Reserve has forecast three interest rate hikes in 2018, with the first expected in March.

Unemployment in the Eurozone is at its lowest level since December 2008, standing at 8.6% across the 19 countries. The UK economy appears to be on track for 0.4% growth so far for the first quarter 2018, with a large growth in business services demanded in February. During February, both the Euro and the US dollar strengthened against Sterling ending the month at EUR1.1292 and $1.3785 respectively

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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March 14, 2018 03:02 ET (07:02 GMT)