Sequoia Economic Infra Inc Fd Ld Net Asset Value(s) (3187R)

TIDMSEQI

RNS Number : 3187R

Sequoia Economic Infra Inc Fd Ld

14 June 2018

14 June 2018

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Company")

Net Asset Value as at 31 May 2018 and Investment Update

Ordinary Share update

The NAV for SEQI, the specialist investor in economic infrastructure debt, increased to 101.10p from the prior month's NAV of 100.39p per share. The changes in NAV arose primarily through:

   --      Interest income net of expenses of 0.54p; 
   --      An increase of 0.01p in asset valuations; 
   --      A decrease of 0.03p from FX movements; and 
   --      A gain of 0.19p from issuance of new equity. 

During May, 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, resulting in gross leverage of GBP5.0m, or 0.60% of NAV, at 31 May 2018. The Company's total net assets after deducting net borrowings were therefore GBP830.5m at month end. The Company also had undrawn commitments and one additional investment in the process of settlement collectively valued at GBP98.4m.

The Company's invested portfolio comprised of 37 private debt investments and 19 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 8.4% and a weighted average life of approximately 4.9 years. Private debt investments represented 81.4% of the total portfolio and 70.3% of it comprised floating rate assets. The weighted average purchase price of the Company's investments was c.96.0% of par. Investments which are pre-operational represented 15.0% of total assets.

The Company's invested portfolio remains geographically diverse with 44% 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 31 May 2018, approximately 95% 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 May include:

-- A GBP7.5m primary loan to Euro Garages, one of the largest independent motorway services providers in the UK and Europe;

   --      An additional GBP1.3m disbursement to Clyde Street student housing in Glasgow; and 
   --      The sale of $29.0m Dulles Greenway 2029 zero-coupon bonds. 

There were no called/prepaid positions during the month of May.

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       52.9          TMT             cable           12.0 
 Salt Creek 
  Midstream               USD       Private     Senior       48.9      Utility         Midstream            6.8 
 A'lienor S.A.S. 
  (A65)                   EUR       Private     Senior       38.8    Transport              Road            5.7 
 Tracy Hills                                                                         Residential 
  TL 2025                 USD       Private     Senior       36.0        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       30.1   Renewables            & Wind            7.4 
 Bulb Energy                                                                         Electricity 
  Senior Secured          GBP       Private     Senior       26.9      Utility            supply            8.8 
 Aquaventure              USD       Private     Senior       26.3      Utility             Water            8.2 
 Abteen Ventures          USD       Private     Senior       26.3          TMT      Data centers            7.9 
 Warnow Tunnel            EUR       Private     Senior       25.4    Transport              Road            6.4 
 Terra-Gen                                                                                 Solar 
  Power TL B              USD       Private     Senior       23.4   Renewables            & wind            9.9 
 Clyde Street                                                                            Student 
  Glasgow                 GBP       Private     Senior       20.6      Accomm.           housing            8.0 
 Exeltium Mezzanine       EUR       Private       Mezz       19.3        Power               PPA            9.4 
 Welcome Break                                                                          Motorway 
  No.1 Ltd                GBP       Private       Mezz       18.3    Transport          services            8.7 
 Theatre 2007-1                                                                          Private 
  D                       GBP        Public       Mezz       15.4        Other         Hospitals           13.1 
 

Note (1) - excluding accrued interest

Market Summary

A total of 28 project finance transactions closed in May throughout the Company's eligible jurisdictions, worth $4.6bn in aggregate. Notable transactions during the month include:

-- A EUR160m long term financing of the first 89 MW phase of the Oweninny wind farm in County Mayo, Ireland.

-- A CAD $1.2bn financing of the Finch West light rail in Toronto, Canada. The bonds are senior secured.

   --      A EUR600m acquisition of the 450MW Neart na Gaoithe offshore wind farm. 

The US economy added 223,000 jobs in May 2018, with unemployment at its lowest level since early 2000, and with average hourly earnings showing a year-on-year gain of 2.7%.

Despite the turbulence in Europe caused by the Italian coalition of Eurosceptic parties, unemployment in the Eurozone also ticked down slightly to 8.5%, which is the lowest recorded rate in the Eurozone since December 2008.

The Bank of England's Monetary Policy Committee declined to raise rates in May. However, earnings growth has moved above inflation, and the BOE is still projecting 0.4% growth in Q2 2018.

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 news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [e-mail] or visit www.rns.com.

END

NAVBUGDLGBBBGIX

(END) Dow Jones Newswires

June 14, 2018 02:00 ET (06:00 GMT)