Sequoia Economic Infra Inc Fd Ld Net Asset Value(s) (1887O)

TIDMSEQI

RNS Number : 1887O

Sequoia Economic Infra Inc Fd Ld

16 May 2018

16 May 2018

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Company")

Net Asset Value as at 30 April 2018 and Investment Update

Ordinary Share update

The NAV for SEQI, the specialist investor in economic infrastructure debt, increased to 100.39p from 99.82p per share (being the 29 March cum-income NAV less the dividend declared in respect of the quarter ended 29 March). The changes in NAV arose primarily through:

   --      Interest income net of expenses of 0.72p; 
   --      A decrease of 0.11p in asset valuations; 
   --      A decrease of 0.04p from FX movements. 

On 19 April 2018, the Company declared a dividend of 1.5p per share to shareholders on the register as at 27 April 2018, in respect of the quarter ended 29 March 2018.

During April, the Company drew an additional GBP35.0m on its revolving credit facility, resulting in gross leverage of GBP75.0m representing c. 10.0% of NAV, and total gross assets of GBP838.5m. The Company's total net assets after deducting net borrowings were therefore GBP751.5m as at 30 April 2018. The Company also had undrawn commitments and one additional investment in the process of settlement collectively valued at GBP29.9m.

On 4 May 2018, the Company completed its successful, oversubscribed equity placing, raising approximately GBP75.7m of gross proceeds. The proceeds have principally been used to repay approximately GBP70.7m of the Company's GBP75.0m gross leverage.

The Company's invested portfolio comprised of 36 private debt investments and 20 infrastructure bonds across 8 sectors and 23 subsectors, and had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.2% and a weighted average life of approximately 5.1 years. Private debt investments represented 80.0% of the total portfolio and 68.8% of it comprised floating rate assets. The weighted average purchase price of the Company's investments was c.95.2% of par. Investments which are pre-operational represented 14.6% of total assets.

The Company's invested portfolio remains geographically diverse with 45% located across the US, 25% in the UK, 23% in Europe, and 8% in Australia/New Zealand. Currently the Company is not investing in Portugal or Italy, but is considering selective opportunities in Spain.

As at 30 April 2018, approximately 94% 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 April include:

-- A $65.0m primary loan to Salt Creek Midstream, a midstream gas gathering and processing plant in West Texas;

   --      A final disbursement of $28.0m, a portfolio of US rooftop solar systems; 

-- A GBP13.7m primary loan to Elysium Healthcare, a UK behavioural health services provider; and

   --      An additional GBP4.0m of Theatre Hospitals plc bonds. 

Lastly, two loans repaid during the month in line with the Company's expectations:

   --      The GBP36.0m bridge loan to Active Assistance; and 
   --      The $28.9m loan to Natgasoline. 

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       50.6          TMT             cable           11.9 
 Salt Creek 
  Midstream               USD       Private     Senior       47.2      Utility         Midstream            6.8 
 A'lienor S.A.S. 
  (A65)                   EUR       Private     Senior       38.9    Transport              Road            3.8 
 Tracy Hills                                                                         Residential 
  TL 2025                 USD       Private     Senior       34.8        Other             infra           10.3 
 Cory Environmental       GBP       Private     HoldCo       31.3      Utility   Waste-to-energy            8.5 
 Sunrun Hera                                                                               Solar 
  2017-B                  USD       Private       Mezz       29.1   Renewables            & Wind            7.4 
 Bulb Energy                                                                         Electricity 
  Senior Secured          GBP       Private     Senior       26.9      Utility            supply            9.0 
 Aquaventure              USD       Private     Senior       25.4      Utility             Water            8.2 
 Abteen Ventures          USD       Private     Senior       25.4          TMT      Data centers            8.0 
 Warnow Tunnel            EUR       Private     Senior       25.3    Transport              Road            6.9 
 Terra-Gen                                                                                 Solar 
  Power TL B              USD       Private     Senior       22.6   Renewables            & wind            9.8 
 Exeltium Mezzanine       EUR       Private       Mezz       19.3        Power               PPA            9.4 
 Clyde Street                                                                            Student 
  Glasgow                 GBP       Private     Senior       19.2      Accomm.           housing            8.0 
 Welcome Break                                                                          Motorway 
  No.1 Ltd                GBP       Private       Mezz       18.3    Transport          services            8.7 
 Theatre 2007-1                                                                          Private 
  D                       GBP        Public       Mezz       15.4        Other         Hospitals           12.0 
 

Note (1) - excluding accrued interest

Market Summary

A total of 28 project finance transactions closed in April throughout the Company's eligible jurisdictions, worth $6.5bn in aggregate. Notable transactions during the month include:

-- A EUR434m refinancing of the A355 motorway in Strasbourg, France, comprised of a bank loan and an EIB loan;

-- A $210m financing of the construction and development of the 161.3MW Pine River Wind Farm in Michigan, United States;

-- A EUR78m EIB loan for the construction of the Kajaani hospital in North East Finland, intended to replace the current, outdated hospital.

In April, the estimate of Q1 GDP growth in the US had slowed to 0.6%, down from 0.7% growth in Q4 2017. Unemployment fell to a 17-year low of 3.9% at the end of the quarter.

Eurozone economic growth in Q1 2018 slowed to 0.4% across the bloc, down from 0.7% in Q4 2017, and the lowest growth rate seen since summer 2016.

The UK economy grew at an even slower pace, posting only 0.1% growth for the first quarter 2018, the lowest in five years.

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] 

Matt Falla

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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May 16, 2018 02:00 ET (06:00 GMT)