Sequoia Economic Infrastructure Income Fund Ltd.

Net Asset Value • Sep 14, 2017

National Storage Mechanism | Additional information

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RNS Number : 6797Q

Sequoia Economic Infra Inc Fd Ld

14 September 2017

14 September 2017

Sequoia Economic Infrastructure Income Fund Limited

Net Asset Value as at 31 August 2017 and Investment Update

Ordinary Share update

SEQI's NAV increased to 100.81 per share from 100.11 per share on 31st July 2017 which arose primarily through:

·      Interest income net of expenses of 0.42p;

·      An increase of 0.08p in asset valuations;

·      An increase of 0.20p from FX movements.

During August, the Company's investment activities resulted in the total invested portfolio of 75.8% of the Company's NAV, with an additional £126.0m either traded but not settled or undrawn commitments. The total amount invested and committed represents 92.5% of the Company's NAV. The Company has gross leverage of £40m representing approximately 5.3% of NAV.

The portfolio held 29 private debt investments and 15 infrastructure bonds for a total of 44 investments that covered 8 sectors and 22 subsectors, and are collectively valued at £577.7m including accrued interest with an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.1% and a weighted average life across the acquired portfolio of approximately 4.6 years. The weighted average purchase price of the Company's acquired investments was approximately 96.2% of par. Investments with construction risk represent 12% of NAV.

As of the 31st August 2017, approximately 89% of NAV consisted of either Sterling assets or was hedged into Sterling. The Company has adequate resources to cover the cash costs associated with its hedging activities. 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.

Approximately 48% of the invested portfolio comprises floating rate assets, with only two LIBOR floor above current LIBOR levels (EUR). As such, the portfolio's yield is likely to rise over time as LIBOR increases. The Company expects the floating rate proportion to exceed 50% once all outstanding trades have settled.

The Company's settled investment activities during August include:

·      The $15.9m Green Plains term loan B was refinanced, and the Company participated in the refinancing with $18m.

·      An additional drawdown of roughly £1.1m to the Clyde Street Glasgow student housing transaction;

·      Sold $15m of the Cheniere Corp Christi 7% 2024 bonds and $15m of GFL Environmental 9.875% 2021 bonds, valued together at £26m.

On 30th August it was announced that the Company would be included in the FTSE 250 index, effective from 18th September 2017.

Ordinary Portfolio Summary (15 largest settled investments)

Transaction name	Currency	Type	Ranking	Value £m(1)	Sector	Sub-sector	Yield to maturity / worst (%)
A'lienor S.A.S. (A65)	EUR	Private	Senior	39.9	Transport	Road	3.45
IO Data Centers	USD	Private	Senior	38.8	TMT	Data centers	9.00
AP Wireless Infrastructure	GBP	Private	Senior	38.0	TMT	Towers	6.25
Cory Environmental	GBP	Private	HoldCo	32.7	Utility	Waste-to-energy	8.50
Regard Group Mezzanine	GBP	Private	Mezz	28.6	Accommodation	Health care	12.12
Abteen Ventures	USD	Private	Senior	27.1	TMT	Data centers	8.00
Hawaiki Mezzanine Loan	USD	Private	Mezz	23.6	TMT	Undersea cable	11.23
Exeltium Mezzanine	EUR	Private	Mezz	21.5	Power	PPA	12.39
Natgasoline	USD	Private	Mezz	21.4	Other	Industrial infra	9.99
Welcome Break No.1 Ltd	GBP	Private	Mezz	18.3	Transport	Motorway services	8.28
Neoen Production	EUR	Private	HoldCo	17.4	Renewables	Solar & wind	6.99
NGG Finance 5.625% 2073	GBP	Public	Mezz	17.1	Utility	Electricity Distribution	3.54
Global Ship Lease 10% 2019	USD	Public	Senior	14.3	Transport assets	Shipping	11.40
NRG Energy Inc 7.25% 2026	USD	Public	Senior	13.3	Power	Electricity Generation	5.87
Dulles Greenway 2029	USD	Public	Senior	12.5	Transport	Road	5.21

Note (1) - excluding accrued interest

Market Summary

A total of 43 project finance transactions closed in August throughout the Company's eligible jurisdictions, and were worth, in aggregate, $16.6bn.

Notable transactions include:

·      The €1.3bn primary financing of the Deutsche Bucht 252MW Offshore Wind Farm, which will be connected to the larger 800MW BorWin Beta offshore converter station;

·      The €900m primary financing of the Grand Est Broadband PPP project in France, which is part of an initiative to roll out fibre broadband to the entire country by 2022;

·      The additional $92.5m equity bridge loan to Mount Signal 3.

It was reported in August that the US economy had the strongest quarter since 2015 with 3% GDP growth despite any meaningful policy progress in Washington.

Confidence in the eurozone has risen to the highest level since July 2007. The European Commission's monthly measure of economic sentiment rose to 111.9 in August, which reflects optimism derived particularly from improving domestic consumer spending throughout the eurozone.

During August, both the Euro and US Dollar strengthened against Sterling ending the month at €1.0854 and $1.2894 respectively, and the Bloomberg USD High Yield Corporate Bond Index rose slightly to 180.7.

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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