Sequoia Economic Infra Inc Fd Ld Net Asset Value(s) (7421A)

TIDMSEQI

RNS Number : 7421A

Sequoia Economic Infra Inc Fd Ld

14 September 2018

14 September 2018

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Company")

Net Asset Value as at 31 August 2018 and Investment Update

Ordinary Share update

The NAV for SEQI, the specialist investor in economic infrastructure debt, increased to 101.17p from the prior month's NAV of 100.46p per share. The changes in NAV arose primarily through:

   --      Interest income net of expenses of 0.66p; 
   --      An increase of 0.04p in asset valuations; 
   --      An increase of 0.01p from FX movements. 

On 09 August 2018, the Company resolved to exercise the GBP50 million accordion tranche of its existing multi-currency Revolving Credit Facility. The RCF and the accordion will continue to be used to fund the Company's strong, diversified pipeline of economic infrastructure debt investments and for working capital purposes.

During the month, the Company drew a total of GBP16.0m from the accordion, resulting in gross leverage of GBP116.0m as at 31 August. The Company's total net assets after deducting net borrowings were therefore GBP831.4m at month end. The Company also had undrawn commitments and two additional investments in the process of settlement, collectively valued at GBP150.1m.

The Company's invested portfolio comprised of 40 private debt investments and 18 infrastructure bonds collectively valued at GBP888.7m (including accrued interest). The investments were diversified across 8 sectors and 24 sub-sectors and had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.6% and a weighted average life of approximately 5.0 years. Private debt investments represented 85.2% of the total portfolio and 64.2% of the portfolio comprised floating rate assets. The weighted average purchase price of the Company's investments was c.97.0% of par. Investments which are pre-operational represented 11.8% of total assets.

The Company's invested portfolio remains geographically diverse with 42% located across the US, 17% in the UK, 29% in Europe, and 12% in Australia/New Zealand. Currently the Company is not investing in Italy but has invested in selective opportunities in Spain.

As at 31 August 2018, the Company's NAV consisted entirely 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 August include:

-- A EUR20.0m primary loan to Mainsite Logistik Holding, a logistics service provider to market leading industrial companies in Germany;

   --     A $10.0m primary loan to Midcoast Energy, a natural gas liquids pipeline in Texas; 

-- An initial disbursement of $4.0m to Whittle Schools for the development of a private school in Washington D.C;

-- An additional disbursement of EUR2.4m to Native Dancer, a student accommodation building in Leiden, The Netherlands; and

   --     An additional secondary purchase of NOK 8.0m Exmar 9.02% 2019 bonds. 

The investments that prepaid or were sold during August include:

   --      The expected GBP26.9m prepayment of the Bulb Energy Term Loan; and 
   --      The expected $9.1m refinancing of the Invenergy Term Loan B. 

Ordinary Portfolio Summary (15 largest settled investments)

 
 Investment name         Currency        Type    Ranking      Value       Sector         Sub-sector          Yield 
                                                            GBPm(1)                                    to maturity 
                                                                                                           / worst 
                                                                                                               (%) 
 
 Hawaiki Mezzanine                                                                         Undersea 
  Loan                      USD       Private       Mezz       54.9          TMT              cable           10.2 
 Salt Creek Midstream       USD       Private     Senior       50.2      Utility          Midstream            6.8 
 Tracy Hills TL                                                                         Residential 
  2025                      USD      Private      Senior       46.3        Other              Infra           10.3 
 Scandlines Mezzanine 
  2032                      EUR       Private     HoldCo       44.7    Transport            Ferries            6.7 
 Adani Abbot Holdco 
  2021                      AUD       Private     HoldCo       41.6    Transport               Port            6.8 
 Bizkaia TL 2021            EUR       Private     HoldCo       35.8        Power   Elec. Generation            7.7 
                                                                                            Solar & 
 Sunrun Hera 2017-B         USD       Private       Mezz       30.9   Renewables               Wind            7.3 
 Cory Environmental         GBP       Private     HoldCo       30.6      Utility    Waste-to-energy            8.5 
 Aquaventure                USD       Private     Senior       27.0      Utility              Water            8.3 
 Abteen Ventures            USD       Private     Senior       26.9          TMT       Data Centers            7.6 
 Warnow Tunnel              EUR       Private     Senior       25.4    Transport               Road            6.9 
 Terra-Gen Power                                                                            Solar & 
  TL B                      USD       Private     Senior       23.7    Renewable               Wind           10.4 
 Panda Patriot              USD       Private     Senior       22.4        Power   Elec. Generation            8.6 
 Clyde Street                                                                               Student 
  Glasgow                   GBP       Private     Senior       21.5      Accomm.            Housing            8.2 
 Project Warsaw                                                                             Solar & 
  2                         EUR       Private     Senior       19.5   Renewables               Wind            5.9 
 

Note (1) - excluding accrued interest

Market Summary

A total of 41 project finance transactions closed in August throughout the Company's eligible jurisdictions, worth $10.1bn in aggregate. Notable transactions during the month include:

-- A $650m financing of the development of the South Field Energy Gas-Fired Power Plant in Ohio, USA;

-- A $1.250bn financing of the acquisition of a 50% stake in the 900MW Triton Knoll Offshore Wind Farm off the coast of England; and

-- A CAD $4,300m financing of the acquisition of the Canadian energy solutions company Enercare.

The US economy added 201,000 jobs in August while the unemployment rate remained steady at 3.9%. The economy grew at an annualized pace of 4.2% in Q2 2018, nearly doubling the 2.2% rate seen in Q1.

Eurozone economic growth has been revised up to 0.4% for Q2 2018, for an annualized rate of 1.5%, and is expected to grow only moderately in Q3 2018.

The UK economy is projected to maintain its 0.4% growth rate for Q3 2018, with continued uncertainty about Brexit.

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.

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September 14, 2018 02:01 ET (06:01 GMT)