Sequoia Economic Infrastructure Income Fund Ltd.

Net Asset Value • Nov 14, 2016

National Storage Mechanism | Additional information

You don't have Javascript enabled. For full functionality this page requires javascript to be enabled.

RNS Number : 0368P

Sequoia Economic Infra Inc Fd Ld

14 November 2016

14 November 2016

Sequoia Economic Infrastructure Income Fund Limited

Net Asset Value as at 31 October 2016 and Investment Update

Ordinary Share update

As of the 31st October 2016, the Company held 23 private debt investments and 13 infrastructure bonds for a total of 36 investments across 8 sectors and 20 subsectors, which are collectively valued at £466.9m including accrued interest, with an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.7% and a weighted average life across the acquired portfolio of approximately 4.8 years.

Approximately 52% of the Ordinary Share portfolio comprises floating rate assets, with only two LIBOR floors above current LIBOR levels (of which one is Sterling and the other is Euros). As such, the portfolio's yield is likely to rise over time as LIBOR increases.

The investments are across the UK, Western Europe, Australia, Canada and the US and include a wide range of asset types including road, rail, utility, power, shipping, renewables and aircraft and ship leasing.

Over the month of October, the Company had its position in IO Data Centres called, and subsequently invested the proceeds in the refinancing of the original transaction. The Company chose to slightly increase the amount invested by $2.5mm, resulting in an aggregate amount of $37.5mm. The first drawdown of the Abteen Ventures term loan was made 20th October. In addition, the Company had its position in Biffa Term Loan A refinanced. 

As Sterling remained volatile against the dollar and the euro over the month of October, the Investment Adviser's goal was to reduce NAV volatility arising from FX movements by continuing to maintain its hedging strategy. As of the 31st October 2016, approximately 80% of NAV was either Sterling assets or hedged into Sterling.

In the months following Brexit, Sterling's continued weakness against the dollar and the euro has had a positive effect on NAV with the gain in the Sterling value of the non-Sterling assets outweighing the loss on the hedges.

The Company has more than adequate resources to cover the cash costs associated with its hedging book. Each of its FX hedge providers has credit lines to the Company which means that the margin calls on the hedge portfolio have been modest.

The small increase in the Ordinary Share NAV (ex-dividend) to 102.00p from 101.29p per share arose primarily through:

·       Interest income net of expenses of 0.46p;

·       An increase of 0.76p in asset valuations;

·       An increase of 0.99p in FX movements; and

·       A dividend declaration of 1.50p.

Conversion of C Shares

The Company is pleased to confirm that 172,404,119 new Ordinary Shares, issued pursuant to the conversion of its C Shares, have been admitted to the premium listing segment of the Official List and to trading on the London Stock Exchange's main market for listed securities. The total number of Ordinary Shares in issue immediately following Admission is 475,412,613.

Ordinary Portfolio Summary (15 largest settled investments)

Transaction name	Currency	Type	Ranking	Value £mm(1)	Sector	Sub-sector	Yield to maturity / worst (%)
A'lienor S.A.S. (A65)	EUR	Private	Senior	33.4	Transport	Road	5.08
IO Data Centers LLC	USD	Private	Senior	30.6	TMT	Data Centers	9.00
AP Wireless Infrastructure	GBP	Private	Senior	27.0	TMT	Towers	6.64
Infinis Bridge	GBP	Private	HoldCo	24.0	Renewables	Solar & Wind	10.00
Regard Group Mezzanine	GBP	Private	Mezz	22.6	Accommodation	Health Care	12.03
Natgasoline Senior Unsecured	USD	Private	Mezz	20.4	Other	Industrial Infrastructure	9.78
Exeltium Mezzanine	EUR	Private	Mezz	20.0	Power	PPA	9.14
Danaos Snr Secured 2018	USD	Private	Senior	18.1	Transport assets	Shipping	17.08
Neoen Production	EUR	Private	HoldCo	17.5	Renewables	Solar & Wind	6.99
Mount Signal Solar	USD	Private	Senior	16.3	Renewables	Solar & Wind	8.50
Longview Power TL B	USD	Private	Senior	13.9	Power	Electricity Generation	10.66
GFL 9.875% 2021	USD	Public	Senior	13.5	Utility	Waste	5.40
Talen Energy Supply 4.6% 2021	USD	Public	Senior	13.1	Power	Electricity Generation	9.14
Green Plains TL B	USD	Public	Senior	11.9	Other	Alternative Fuel	9.96
Reliance Rail Finance 2018	AUD	Private	Senior	11.7	Transport assets	Rolling Stock	5.96

Note (1) - excluding accrued interest

Market Summary

October was an active month in the infrastructure debt sector, with 13 European project finance transactions reaching financial close across the month.

Notable transactions include the £900mm Angel Trains East Anglia rolling stock procurement. In addition, €850mm of debt was raised for the development of the 309MW Rentels offshore wind farm located in the Belgian territorial waters.

News flow was dominated with the run up to the US presidential election. The US stock market weakened amid uncertainty regarding interest rates coupled with some poor company earnings reports. There was also doubt regarding the support for global quantitative easing.

During October, Sterling fell further against both the dollar and euro, ending the month at $1.22 and €1.12 respectively. The Bloomberg USD High Yield Corporate Bond Index remained flat at 167.

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

END

NAVFXLLFQFFBFBF