Sequoia Economic Infrastructure Income Fund Ltd.

Net Asset Value • Sep 14, 2020

National Storage Mechanism | Additional information

RNS Number : 8088Y

Sequoia Economic Infra Inc Fd Ld

14 September 2020

14 September 2020

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Company")

NAV update

The NAV for SEQI, the specialist investor in economic infrastructure debt, increased to 98.98 pence per share from the prior month's NAV of 98.02 pence per share, representing an increase of 0.96 pence per share.

The gain in asset valuations can be attributed primarily by spread tightening of comparable investments across the portfolio and continued positive credit developments in the wake of the ongoing COVID-19 pandemic.

A full attribution of the changes in the NAV per share is as follows:

	pence per share
July NAV	98.02
Interest income, net of expenses	0.54
FX movements, net of hedges	0.03
Increase in asset valuations	0.39
August NAV	98.98

Update on the effects of COVID-19 on the Portfolio

The Investment Adviser, the Investment Manager, and PWC, the independent valuation agent have continued analysing the effect of COVID-19 on the Company's portfolio which also includes a market benchmarking exercise to conclude on spread and yield adjustments for each of the investments.

In summary, the spread widening across the portfolio during the second half of March 2020 continued its reversal throughout August, with several of the Company's investments performing better than expectations throughout the lockdown. The spread tightening seen in the markets and the broader credit outperformance contributed to another market movements gain this month of 0.39 pence per share.

Further Portfolio update

As at 28 August 2020, the Company had cash of £94.2m and had drawn £80.1m on its £280m Revolving Credit Facility. The Company also had undrawn commitments on existing investments collectively valued at £59.7m. As of 28 August 2020, the Company's invested portfolio comprised of 62 private debt investments and 12 infrastructure bonds across 8 sectors and 28 sub-sectors. It had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 10.1% and a weighted average life of approximately 5.5 years. Private debt investments represented 94% of the total portfolio and 63% of the portfolio comprised floating rate assets. The weighted average purchase price of the Company's investments was 96.7% of par. Investments which are pre-operational represented 11.2% of total assets.

The Company's invested portfolio remains geographically diverse with 52% located across the US, 16% in the UK, 26% in Europe, and 6% in Australia/New Zealand. Currently the Company is not investing in Portugal or Italy but has selectively invested in opportunities in Spain. The Company's pipeline of economic infrastructure debt investments remains strong and is diversified by sector, sub-sector, and jurisdiction.

At month end, approximately 100% of the Company's NAV consisted of either Sterling assets or was hedged into Sterling. The Company has adequate resources to cover margin calls on its hedging book.

The Company's settled investment activities during August include:

·      An additional $0.9m loan to Bourzou Equity, a company created for a data centre in Virginia.

None of the Company's investments were sold or prepaid in August.

Ordinary Portfolio Summary (15 largest settled investments)

Investment name	Currency	Type	Ranking	Value £m(1)	Sector	Sub-sector	Yield to maturity / worst (%)
AP Wireless Junior	EUR	Private	Mezz	61.5	TMT	Telecom towers	6.2
Hawaiki Mezzanine Loan	USD	Private	Mezz	50.7	TMT	Undersea cable	15.0
Expedient Data Centers Senior Secured	USD	Private	Senior	48.2	TMT	Data centers	5.9
Scandlines Mezzanine 2032	EUR	Private	HoldCo	43.8	Transport	Ferries	7.4
Euroports 2nd Lien 2026	EUR	Private	Mezz	43.4	Transport	Port	8.7
Terra-Gen Power TL B	USD	Private	Senior	43.2	Renewables	Solar & wind	7.3
Bannister Senior Secured	GBP	Private	Senior	41.6	Accomm.	Health care	7.6
Hawkeye Solar HoldCo 2030 1, 2, and 3	USD	Private	HoldCo	41.2	Renewables	Solar & wind	8.2
Adani Abbot HoldCo 2021	AUD	Private	HoldCo	40.9	Transport	Port	12.9
Bizkaia TL 2021	EUR	Private	HoldCo	40.8	Power	Elec. generation	8.7
Jetpeaks HoldCo 2027	USD	Private	HoldCo	40.0	Power	Elec. generation	7.8
Tracy Hills TL 2025	USD	Private	Senior	40.0	Other	Residential infra	8.5
GenOn Bowline Senior Secured 2026	USD	Private	Senior	37.5	Power	Elec. generation	8.0
Warnow Tunnel	EUR	Private	Senior	37.2	Transport	Road	8.5
Corral HoldCo 2024	USD	Private	HoldCo	35.7	Other	Refinery	11.2

Note (1) - excluding accrued interest

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                              +44 (0)20 7079 0480

Steve Cook

Dolf Kohnhorst

Randall Sandstrom

Greg Taylor

Anurag Gupta

Jefferies International Limited                                                       +44 (0)20 7029 8000

Gaudi le Roux

Neil Winward

Tulchan Communications (Financial PR)                                    +44 (0)20 7353 4200

Martin Pengelley

Elizabeth Snow

Deborah Roney

Praxis Fund Services Limited (Company Secretary)               +44 (0) 1481 755530

Matt Falla

Katrina Rowe                                                                                       

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.

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