Sequoia Economic Infrastructure Income Fund Ltd.

Net Asset Value • Feb 14, 2023

National Storage Mechanism | Additional information

RNS Number : 7803P

Sequoia Economic Infra Inc Fd Ld

14 February 2023

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

14 February 2023

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Company")

NAV update

The NAV per share for SEQI, the specialist investor in economic infrastructure debt, increased to 93.55 pence per share from the prior month's NAV per share of 91.99 pence per share, (being the 31 December 2022 cum-income NAV of 93.71 less the dividend of 1.71875 pence per share declared in respect of the quarter ended 31 December 2022), representing an increase of 1.56 pence per share. A full attribution of the changes in the NAV per share is as follows:

	pence per share
December NAV	93.71
Interest income, net of expenses	0.79
Asset valuations, net of FX movements	0.77
Dividends	-1.72
January NAV	93.55

As the Company is approximately 100% currency hedged, it does not expect to realise any material FX gains or losses over the life of its investments. However, the Company's NAV may include unrealised short-term FX gains or losses, driven by differences in the valuation methodologies of its FX hedges and the underlying investments - such movements will typically reverse over time.

Investment Advisor update

The Investment Advisor has hired Leah Dean as a dedicated ESG analyst to further strengthen its ESG capabilities. The role will include enhancing the Company's ESG reporting, ensuring compliance with various ESG regulatory reporting matters (e.g., SFDR) and engagement with borrowers with a view to improving their ESG practices.

During January 2023, the Investment Adviser acquired 334,733 Ordinary Shares in relation to fees payable for the three-month period ended 31 December 2022. Following the purchase, the Investment Adviser has an interest in 4,436,464 Ordinary Shares.

Portfolio update

As at 31 January 2023, the Company had cash of £49.9m and had drawn £161.9m on its £325.0m revolving credit facility with the remaining balance available to support the Company's working capital and liquidity requirements. The Company also had undrawn commitments on existing investments collectively valued at £56.7m. The Company's invested portfolio consisted of 62 private debt investments and 5 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 11.4% and a cash yield of 7.3%. The weighted average portfolio life is approximately 3.6 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 51.0% located across the US, 24.7% 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 liquidity 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 price of fixed rate assets (which further 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 January (excluding small loan drawings of less than £0.5m):

• An additional loan for £14.1m to Project Spinnaker (Toob Limited), a high-speed Broadband provider in the UK; and

• An additional loan for PLN 15.4m (equivalent to £2.9m) to Green Genius to finance the construction of solar PV projects in Poland.

No investments sold or prepaid in January.

Non-performing loans

There has been ongoing progress over the past month in relation to the Company's non-performing loans and there has been no significant changes in their book value as at 31 January 2023.

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 Secured 2025	GBP	Private	Senior	60.3	Accommodation	Health care	11.27	12.87
AP Wireless Junior	EUR	Private	Mezz	59.1	TMT	Telecom towers	6.76	7.90
AP Wireless US Holdco	USD	Private	HoldCo	58.6	TMT	Telecom towers	6.23	9.11
Montreux HoldCo Facility	GBP	Private	HoldCo	57.3	Accommodation	Health care	13.46	13.90
Infinis Energy	GBP	Private	Senior	56.5	Renewables	Landfill gas	5.76	6.99
Project Tyre	USD	Private	Senior	56.4	Transport assets	Specialist shipping	10.43	10.43
Tracy Hills TL 2025	USD	Private	Senior	55.7	Other	Residential infra	10.63	10.62
Lightspeed Fibre Group Ltd	GBP	Private	Senior	55.7	TMT	Broadband	6.63	13.65
Hawkeye Solar HoldCo 2030	USD	Private	HoldCo	54.2	Renewables	Solar & wind	8.96	9.79
GenOn Bowline Senior Secured	USD	Private	Senior	53.3	Power	Energy transition	11.83	11.82
Expedient Data Centers Senior	USD	Private	Senior	51.6	TMT	Data centers	10.36	10.82
Workdry	GBP	Private	Senior	50.0	Utility	Utility Services	6.96	6.95
Project Spinnaker	GBP	Private	Senior	48.9	TMT	Broadband	9.00	9.49
EIF Van Hook TL B 2024	USD	Private	Senior	47.3	Utility	Midstream	10.19	10.95
Madrid Metro	EUR	Private	HoldCo	46.5	Transport assets	Rolling stock	1.40	7.36

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

Stuart Klein

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

Martin Pengelley

Elizabeth Snow

Sanne Fund Services Guernsey Limited                                     +44 (0) 20 3530 3107

(Company Secretary)                                                                       

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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