Sequoia Economic Infrastructure Income Fund Ltd.

Notice of Dividend Amount • Dec 14, 2022

National Storage Mechanism | Additional information

RNS Number : 6097J

Sequoia Economic Infra Inc Fd Ld

14 December 2022

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

14th Dec 2022

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Company")

Increased dividend target

In November 2022, the annualised target dividend increased by 10% from 6.25p to 6.875p per share, with effect from the current (3rd) quarter of the 2023 financial year. The quarterly dividend with respect to the third quarter of the 2023 financial year is expected to be declared in January 2023.

The Investment Adviser expects the Company's dividend cover to improve materially for the 2023 financial year as the portfolio's floating rate investments (representing 59% of the portfolio) continue to benefit from increasing short term interest rates.

NAV update

The NAV per share for SEQI, the specialist investor in economic infrastructure debt, increased to 93.25 pence per share from the prior month's NAV per share of 92.14 pence per share, representing an increase of 1.11 pence per share.

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

	pence per share
October NAV	92.14
Interest income, net of expenses	0.49
Asset valuations FX movements, net of hedges	1.11          -0.49
November NAV	93.25

Portfolio update

As at 30 November, the Company had cash of £39.5m and had drawn £165.2m on its £325.0m revolving credit facility. The Company also had undrawn commitments on existing investments collectively valued at £66.9m. The Company's invested portfolio consisted of 62 private debt investments and 6 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 11.0% and a cash yield of 7.1%. The weighted average portfolio life is approximately 3.7 years. Private debt investments represented 98% of the total portfolio and 59% of the portfolio comprised floating rate assets.

The Company's invested portfolio remains geographically diverse with 52.6% located across the US, 23.1% in the UK, 24.1% in Europe, and 0.2% in Australia/New Zealand. 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.

Over recent months reductions in asset values have been primarily due to increases in risk-free rates and credit spreads. The rise in risk-free rate adjustments have also increased the yield-to-maturity of floating rate investments and reduced the clean price of fixed rate assets (which also increases the yield-to-maturity). Investors are reminded that these declines are unrealised mark-to-market adjustments that should reverse over time as the investments approach their repayment date (the "pull-to-par" effect).

The following investments settled in November (excluding small loan drawings of less than $0.5m):

• An additional loan for $11.6m to Sunrun Safe Harbor HoldCo, a US-based manufacturer of solar energy equipment;

• An additional loan for £5.8m to Clyde Street, a hotel construction project in Scotland; and

• An additional Senior loan for PLN 13.3m (equivalent to $3.0m) to Green Genius to finance the construction of solar PV projects in Poland.

The following investments sold or prepaid in November:

• A full sale of Bluewater Holding BV's 10% 2023 bonds for $16.6m, a midstream oil and gas processing, storage, and offloading facility in Norway;

• A full sale of American Tanker (AMSC) 2025 bonds for $11.9m, a US-based tanker company;

• A partial sale for $8.4m of Brightline 2028 bonds, a privately owned passenger rail project in Florida; and

• A partial sale for $4.6m of Windstream 2027 bonds, a high-speed Broadband provider in the USA.

On average, the new investments have a higher ESG Score than those disposed of during the month.

There has been good progress over the past month in relation to the Company's non-performing loans:

• 4000 Connecticut Avenue (formerly Whittle School): the borrower has continued the execution of its re-capitalisation strategy for the property and the value of this loan has remained unchanged this month.

• Bulb Energy: the Investment Adviser continues with its strategy of achieving value from Bulb Energy and its parent, Simple Energy. To date, SEQI has received £14.0 million of repayments from Simple Energy. The mark on the Bulb loan has remained unchanged this month.

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 (%)
Bannister Senior	GBP	Private	Senior	60.3	Accommodation	Health care	10.03	11.76
AP Wireless US	USD	Private	HoldCo	60.0	TMT	Telecom towers	6.28	9.40
Project Tyre	USD	Private	Senior	58.6	Transport assets	Specialist shipping	8.26	8.26
Tracy Hills TL 2025	USD	Private	Senior	57.4	Other	Residential infra	10.59	10.59
AP Wireless Junior	EUR	Private	Mezz	57.4	TMT	Telecom towers	6.78	7.93
Montreux HoldCo	GBP	Private	HoldCo	57.4	Accommodation	Health care	12.96	13.14
Hawkeye Solar	USD	Private	HoldCo	55.7	Renewables	Solar & wind	8.99	9.84
Infinis Energy	GBP	Private	Senior	55.2	Renewables	Landfill gas	5.89	7.28
GenOn Bowline	USD	Private	Senior	55.0	Power	Energy transition	9.30	9.29
Expedient Data	USD	Private	Senior	52.8	TMT	Data centers	9.25	9.88
Madrid Metro	EUR	Private	HoldCo	51.8	Transport assets	Rolling stock	1.41	7.46
EIF Van Hook TL	USD	Private	Senior	51.0	Utility	Midstream	9.48	10.80
Workdry	GBP	Private	Senior	50.0	Utility	Utility Services	5.69	5.69
Sacramento Data	USD	Private	Senior	47.3	TMT	Data centers	7.50	8.57
Lightspeed Fibre	GBP	Private	Senior	43.4	TMT	Broadband	7.05	13.57

Note (1) - excluding accrued interest

Disclaimer: the dividend increase is a target and not a profit forecast

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

Sanne Fund Services Guernsey Limited  

(Company Secretary)                                                                        +44 (0) 1481 755530

Matt Falla

Shona Darling                                                                                     

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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