Sequoia Economic Infrastructure Income Fund Ltd.

Net Asset Value • Nov 13, 2015

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RNS Number : 5813F

Sequoia Economic Infra Inc Fd Ld

13 November 2015

13 November 2015

Sequoia Economic Infrastructure Income Fund Limited

Net Asset Value as at 30 October 2015 and Investment Update

As of the 30th October 2015, the Ordinary share class held 14 infrastructure bonds and 13 private debt investments, collectively valued at £137.3m including accrued interest, with an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 7.8% and a weighted average life across the acquired portfolio of approximately 6.8 years.

Acquisitions in October comprised a French Renewables HoldCo Loan (directly originated by Sequoia) and a bond issued by a Canadian waste management company, as well as additions to existing positions including a UK Waste company, Australian Rolling Stock and a US electricity generation loan.

In aggregate, the price of these 27 transactions represents approximately 94.5% of the Net Asset Value of the Company. The Company is now materially fully invested. The investments are across the UK, Western Europe, Australia, Canada and the US and include the road, rail, shipping, utility, elderly care and aircraft leasing sectors. The Company has not disposed of any investments since the IPO apart from participating in a tender for £1.6m of bonds, where the issuer bought the bonds back at par, resulting in a modest gain of circa 3%. The weighted average purchase price of the Company's acquired investments is less than 94% of par.

The decrease in the Company's NAV to 95.95p per share in the month arises through:

· Positive market movements, including marking investments purchased for the portfolio to the bid price, of 0.9p per share; plus

· Interest income net of expenses of 0.3p per share; less

· The cost of writing acquired assets to the bid price, of 0.2p; and

· FX losses, net of hedge movements, of 1.3p per share.

The Company is pleased to announce it raised a further £147m through a C share offering which closed on 2nd November 2015. As a result, the overall size of the Company has almost doubled.

Portfolio Summary

Ten largest investments

Transaction name	Currency	Type		Value £mm	% of NAV	Sector	Sub-sector	Yield to maturity / worst (%)
Ranking
Neoen Production 1 S.A.S.U	EUR	Private	HoldCo	13.9	9.7%	Renewables	Solar & Wind	7.00
Biffa TL A	GBP	Private	Senior	11.7	8.1%	Utility	Waste	6.78
Exeltium Mezzanine	EUR	Private	Mezz	11.4	7.9%	Power	PPA	8.50
Danaos Snr Secured 2018	USD	Private	Senior	8.6	6.0%	Transport assets	Shipping	6.41
Dulles Greenway 2029	USD	Public	Senior	7.7	5.4%	Transport	Road	6.82
North Las Vegas Water 6.572% 2040	USD	Public	Senior	7.0	4.9%	Utility	Water	7.53
Global Ship Lease 10% 2019	USD	Public	Senior	6.5	4.5%	Transport assets	Shipping	9.64
Invenergy TL B	USD	Private	Senior	6.4	4.5%	Power	Electricity Generation	6.63
Green Plains TL B	USD	Private	Senior	6.4	4.5%	Other	Alternative fuel	6.15
Ascendos Rail 2nd lien	EUR	Private	Mezz	5.1	3.6%	Transport assets	Rail	4.81
Sub- total / average				84.9	59.0%			7.12
Positions outside top ten				51.1	35.5%			8.92
Portfolio total / average				135.9	94.5%			7.79

Market Summary

October showed some activity in the infrastructure debt sector with nine transactions closing across the UK and Western Europe. Notable deals included the £1.7bn financing for the Galloper UK Offshore Wind Farm and the €1.1bn notes issue for Autostrade Per L'Italia.  In addition, Octopus Investments acquired a 522MW senior secured UK Solar portfolio for £400mm.

Senior secured infrastructure debt for core assets, particularly having availability payment mechanisms, continues to be aggressively bid with margins approaching +100 bps with both bank and institutional investors active.  In demand driven transactions, the Fund has continued to see opportunities to achieve yields in excess of 7% in both primary originations and continued bank deleveraging.

Sterling strengthened materially against both the US dollar and the euro in October, with the dollar moving from $1.51 to $1.54 and the euro ending at €1.40 compared with €1.35 at the end of September.

US news flow was dominated by the Federal Reserve raising the likelihood of an interest rate hike in December.  In Europe, rising speculation over ECB monetary stimulus with the hint of expanding the quantitative easing programme helped to boost corporate bond returns. The Bloomberg USD High Yield Corporate Bond Index rose by 3% over the month, following a sharp decline in September.

10-year US Treasury rates rose by approximately 11 bps to 2.14%. Euro term rates remained steady over the month with 10-year Bund yields unchanged at approximately 51 bps.

The Company's monthly investor report and additional portfolio disclosure will be made available at http://www.seqifund.com/.

Sequoia Investment Management Company

Randall Sandstrom / Steve Cook                                     Telephone 020 7079 0483 / 020 7079 0481

Stifel Nicolaus Europe Limited

Neil Winward / Mark Bloomfield / Gaudi Le Roux              Telephone 020 7710 7600

International Fund Management Limited

Chris Hickling                                                                Telephone 01481 737600

About Sequoia Economic Infrastructure Income Fund Limited

The Company is a Guernsey registered closed-ended investment company that 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.  The Company has been advised that the Shares can be considered as "excluded securities" for the purposes of the FCA rules regarding the definition and promotion of Non-Mainstream Pooled Investments (NMPIs).

This information is provided by RNS

The company news service from the London Stock Exchange

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