Sequoia Economic Infrastructure Income Fund Ltd.

Net Asset Value • Nov 12, 2021

National Storage Mechanism | Additional information

RNS Number : 1596S

Sequoia Economic Infra Inc Fd Ld

12 November 2021

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES

12th November 2021

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 101.72 pence per share from the prior month's NAV of 101.38 pence per share, (being the 30 September 2021 cum-income NAV of 102.94 less the dividend of 1.5625 pence per share declared in respect of the quarter ended 30 September 2021), representing an increase of 0.34 pence per share.

	pence per share
September NAV	102.94
Interest income, net of expenses	0.57
FX movements, net of hedges Dividends	-0.10           -1.56
Decrease in asset valuations	-0.13
October NAV	101.72

Portfolio update

As of 29 October 2021, the Company had cash of £96.6m and had drawn £90.2m on its revolving credit facility. The Company also had undrawn commitments on existing investments collectively valued at £45.9m. The Company's invested portfolio consisted of 65 private debt investments and 11 infrastructure bonds across 8 sectors and 30 sub-sectors. It had an annualised yield‑to‑maturity (or yield‑to‑worst in the case of callable bonds) of 8.8% and a cash yield of 5.9%. The weighted average portfolio life is approximately 4.3 years. Private debt investments represented 95% of the total portfolio and 50% of the portfolio comprised floating rate assets. Investments which are pre‑operational represented 10% of total assets.

The Company's invested portfolio remains geographically diverse with 47% located across the US, 18% in the UK, 30% in Europe, and 5% 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.

Overall, the portfolio continues to perform solidly. As economies re-open, a number of under‑performing assets in the transport sector especially have seen significant improvements in their revenues. For example, the Talen 10.5% 2026 bonds, which fell sharply in August, are up just over 20% over the course of September and October. The decrease in asset valuations is mainly attributable to the decline in the valuation of the Salt Lake Potash investment.

As recently communicated, Salt Lake Potash, (1.8% of NAV) announced a Voluntary Administration of the company on 20 October 2021. The lender group has appointed KordaMentha, a leading Australian restructuring and advisory firm, as receivers for the lender group. Under Australian restructuring processes, receivers act for the benefit of lenders and can take a variety of measures including trade sales of the company, debt sales or other restructuring activities to preserve lender value and maximise recovery. This work is currently ongoing. The Investment Adviser notes that the cost base of the project and equity invested to date materially exceeds the total debt quantum and that a similar potash project utilising evaporative production processes for sulphate of potash production has recently achieved first production, albeit with reportedly similar ramp-up issues as SO4. Whilst it is too early to comment on the eventual recovery percentage of our investment, our senior secured position should position us strongly in the restructuring process.

The Investment Adviser is highly focused on this position, as well as two other underperforming assets which include a loan to a UK energy supply company and a US property operated a private school. We will continue to update investors when appropriate.

The Company's settled investment activities during October include:

• A €55m loan to Project Nimble, a data centre based in the Netherlands;

• An additional $720,000 disbursement to Lanthanum, a leading developer of hyperscale data centres in Virginia;

• An additional $5.3 loan to Sunrun Radcliffe, a US-based manufacturer of solar energy equipment;

• An additional £1.1m loan to Clyde Street Facility B, a development Glasglow.

The following assets sold or prepaid in October:

• A partial sale of £4.2m of Voyage Care 2023 bonds, a care home provider for people with disabilities;

• A partial sale of €1.3m of Ziton Senior Secured 2023 bonds, a specialised operations and maintenance service provider for offshore wind farms.

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 (%)
Madrid Metro	EUR	Private	HoldCo	65.6	Transport assets	Rolling stock	0.00	5.40
Infinis Energy	GBP	Private	Senior	65.0	Renewables	Landfill gas	5.00	5.00
AP Wireless Junior	EUR	Private	Mezz	60.1	TMT	Telecom towers	4.22	6.13
Hawaiki Mezzanine Loan	USD	Private	Mezz	55.7	TMT	Undersea cable	8.34	9.06
Bannister Senior Secured	GBP	Private	Senior	55.2	Accommodation	Health care	6.64	6.64
Hawkeye Solar HoldCo	USD	Private	HoldCo	54.5	Renewables	Solar & wind	8.05	7.84
Tracy Hills TL 2025	USD	Private	Senior	53.9	Other	Residential infra	8.09	8.09
Bulb Senior TL 2022	GBP	Private	Senior	52.6	Utility	Electricity supply	6.87	10.41
Brightline	USD	Private	Senior	51.2	Transport	Rail	8.00	8.00
AP Wireless US Holdco	USD	Private	HoldCo	50.6	TMT	Telecom towers	6.00	6.00
Expedient Data Centers	USD	Private	Senior	47.0	TMT	Data centers	5.56	5.74
Project Nimble	EUR	Private	HoldCo	46.4	TMT	Data centers	8.05	8.04
Sacramento Data Centre	USD	Private	Senior	44.6	TMT	Data centers	7.00	7.00
Scandlines Mezzanine	EUR	Private	HoldCo	44.4	Transport	Ferries	0.00	9.23
Euroports 2nd Lien 2026	EUR	Private	Mezz	42.8	Transport	Port	7.77	7.71

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

This announcement is not for publication or distribution, directly or indirectly, in or into the United States of America.  This announcement is not an offer of securities for sale into the United States.  The securities referred to herein have not been and will not be registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States, except pursuant to an applicable exemption from registration.  No public offering of securities is being made in the United States.

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.

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 rns@lseg.com or visit www.rns.com.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our Privacy Policy.

END

NAVFFMESFEFSEEF