Sequoia Economic Infrastructure Income Fund Ltd.

Net Asset Value • Dec 14, 2020

National Storage Mechanism | Additional information

RNS Number : 4489I

Sequoia Economic Infra Inc Fd Ld

14 December 2020

14 December 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 100.27 pence per share from the prior month's NAV of 98.96 pence per share, representing an increase of 1.31 pence per share.

The gain in asset valuations this month can be attributed primarily to the noticeable spread tightening of comparable investments across the portfolio following the announcement of the coronavirus vaccines and the US election results.

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

	pence per share
October NAV	98.96
Interest income, net of expenses	0.64
FX movements, net of hedges	-0.03
Increase in asset valuations	0.70
November NAV	100.27

Update on the effects of COVID-19 on the Portfolio

The Investment Adviser, the Investment Manager, and PWC, the independent valuation agent, have continued their close analysis of the effects 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. The Investment Adviser is also closely monitoring the Company's assets that have not been performing as expected.

Broadly speaking, the spread widening across the portfolio during the second half of March 2020 continued its reversal throughout November, with several of the Company's investments performing better than expectations after the initial and second lockdown.

Further Portfolio update

As at 30 November 2020, the Company had cash of £60.2m and had drawn £80.1m on its £280m Revolving Credit Facility. The Company also had undrawn commitments on existing investments collectively valued at £145.1m. As of 30 November 2020, the Company's invested portfolio comprised of 61 private debt investments and 12 infrastructure bonds across 8 sectors and 27 sub-sectors. It had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 9.2% and a cash yield of 6.0%. The weighted average portfolio life is approximately 5.5 years. Private debt investments represented 94% of the total portfolio and 64% of the portfolio comprised floating rate assets. The weighted average purchase price of the Company's investments was 97.0% of par. Investments which are pre-operational represented 11.0% of total assets.

The Company's invested portfolio remains geographically diverse with 51% located across the US, 16% in the UK, 27% 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 98.0% 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 November include:

·      A $30.0m Opco loan to Cardinal States Gathering Company LLC backed by 7 interconnecting natural gas pipelines throughout the US;

·      An additional $10.0m Holdco disbursement to CSG Holdings, which owns 100% of Cardinal States Gathering Company LLC;

·      An additional €10.6m disbursement to Care4U Invest, an Irish residential and day services provider for adults with an intellectual disability;

·      An additional €7m purchase of Ziton AS' 6.90% 2022 first-lien bonds backed by three offshore wind maintenance vessels;

·      An additional $2m purchase of Navigator Holdings' 8% 2025 bonds, a leading player within the transportation of liquified gases;

·      An additional $0.4m disbursement to Bourzou Equity, a company created for a data center in Virginia.

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

Ordinary Portfolio Summary (15 largest settled investments)

Investment name	Currency	Type	Ranking	Value £m(1)	Sector	Sub-sector	Cash-on-cash yield (%)	Yield to maturity / worst (%)
AP Wireless Junior	EUR	Private	Mezz	62.1	TMT	Telecom towers	4.25	6.25
Hawaiki Mezzanine Loan	USD	Private	Mezz	53.4	TMT	Undersea cable	9.00	11.32
Warnow Tunnel Tranches	EUR	Private	Senior	49.4	Transport	Road	1.54	4.29
Expedient Data Centers	USD	Private	Senior	48.1	TMT	Data centers	5.67	5.84
Care4U Senior Secured	EUR	Private	Senior	45.3	Accom.	Health care	6.50	6.50
Euroports 2nd Lien 2026	EUR	Private	Mezz	44.7	Transport	Port	7.92	8.24
Scandlines Mezzanine 2032	EUR	Private	HoldCo	43.3	Transport	Ferries	0.00	7.67
Bannister Senior Secured	GBP	Private	Senior	42.1	Accom.	Health care	6.58	6.78
Bizkaia TL 2021	EUR	Private	HoldCo	41.1	Power	Electricity generation	7.78	8.24
Adani Abbot HoldCo 2021	AUD	Private	HoldCo	41.1	Transport	Port	6.58	14.70
Hawkeye Solar HoldCo 2030	USD	Private	HoldCo	40.8	Renewables	Solar & wind	9.25	9.25
Jetpeaks HoldCo 2027	USD	Private	HoldCo	39.5	Power	Electricity generation	7.49	8.02
Kenai HoldCo 2024	EUR	Private	HoldCo	39.2	Power	Electricity generation	0.00	11.71
Terra-Gen Power TL B	USD	Private	Senior	39.1	Renewables	Solar & wind	5.35	7.20
Tracy Hills TL 2025	USD	Private	Senior	38.6	Other	Residential infra.	8.15	8.15

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

Laura Marshall

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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