Sequoia Economic Infrastructure Income Fund Ltd.

Net Asset Value • Aug 14, 2018

National Storage Mechanism | Additional information

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RNS Number : 6625X

Sequoia Economic Infra Inc Fd Ld

14 August 2018

14 August 2018

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Company")

Net Asset Value as at 31 July 2018 and Investment Update

Ordinary Share update

The NAV for SEQI, the specialist investor in economic infrastructure debt, increased to 100.46p from the prior month's NAV of 100.16p per share (being the 29 June cum-income NAV less the dividend declared in respect of the quarter ended 29 June). The changes in NAV arose primarily through:

·      Interest income net of expenses of 0.58p;

·      A decrease of 0.05p in asset valuations;

·      A decrease of 0.23p from FX movements.

On 19 July 2018, the Company declared a dividend of 1.50p per share to shareholders on the register as at 27 July 2018, in respect of the quarter ended 29 June 2018.

During July, the Company drew the remaining £14.4m from its revolving credit facility to acquire a number of attractive economic infrastructure debt opportunities, resulting in gross leverage of c. £100m at month end. The Company's total net assets after deducting net borrowings were £825.6m at month end. The Company also had undrawn commitments and four additional investments in the process of settlement, collectively valued at £122.6m.

The Company's invested portfolio comprised of 39 private debt investments and 18 infrastructure bonds across 8 sectors and 23 sub-sectors and had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.7% and a weighted average life of approximately 4.8 years. Private debt investments represented 85.2% of the total portfolio and 63.2% of the portfolio comprised floating rate assets. The weighted average purchase price of the Company's investments was c.97.0% of par. Investments which are pre-operational represented 11.2% of total assets.

The Company's invested portfolio remains geographically diverse with 41% located across the US, 21% in the UK, 26% in Europe, and 12% in Australia/New Zealand. Currently the Company is not investing in Portugal or Italy but has invested in selective opportunities in Spain. The Company's pipeline of economic infrastructure debt investments remains strong and is diversified by sector, sub-sector, and jurisdiction.

As at 31 July 2018, the Company's NAV consisted entirely of either Sterling assets or was hedged into Sterling. The Company has adequate resources to cover the cash costs associated with its hedging activities.

The Company's settled investment activities during July include:

·      An initial disbursement of $23.1m to Prime Data Centres for the development of a data centre campus in Sacramento, California;

·      An additional $12.1m primary loan to Tracy Hills, a residential infrastructure project in California.

The investments that prepaid or were sold during July include:

·      The expected €44.5m refinancing of the A'lienor A65 term loan;

·      The sale of $8.5m Apollo Aviation 2016-2 Class C loan;

·      The sale of £8.7m Peterborough 5.581% 2042 bonds;

·      The sale of $2.6m Apollo Aviation 2016-1 A Class C 9.197% bonds; and

·      The sale of $4.6m Apollo Aviation 2018-1 Class C 6.413% bonds.

Ordinary Portfolio Summary (15 largest settled investments)

Transaction name	Currency	Type	Ranking	Value £m(1)	Sector	Sub-sector	Yield to maturity / worst (%)
Hawaiki Mezzanine Loan	USD	Private	Mezz	54.1	TMT	Undersea cable	12.0
Salt Creek Midstream	USD	Private	Senior	49.5	Utility	Midstream	6.8
Tracy Hills TL 2025	USD	Private	Holdco	45.7	Other	Residential infra	10.3
Scandlines Mezzanine 2032	EUR	Private	Holdco	44.6	Transport	Ferries	6.7
Adani Abbot Holdco 2021	AUD	Private	Holdco	42.5	Transport	Port	6.8
Bizkaia TL 2021	EUR	Private	Holdco	35.7	Power	Electricity Generation	7.7
Cory Environmental	GBP	Private	HoldCo	30.6	Utility	Waste-to-energy	8.5
Sunrun Hera 2017-B	USD	Private	Mezz	30.5	Renewables	Solar & Wind	7.3
Bulb Energy Senior Secured	GBP	Private	Senior	26.9	Utility	Electricity supply	9.0
Aquaventure	USD	Private	Senior	26.7	Utility	Water	8.3
Abteen Ventures	USD	Private	Senior	26.6	TMT	Data centers	7.3
Warnow Tunnel	EUR	Private	Senior	25.2	Transport	Road	6.9
Terra-Gen Power TL B	USD	Private	Senior	23.6	Renewables	Solar & wind	10.1
Panda Patriot	USD	Private	Senior	22.1	Power	Electricity Generation	8.6
Clyde Street Glasgow	GBP	Private	Senior	21.4	Accomm.	Student Housing	8.2

Note (1) - excluding accrued interest

Market Summary

A total of 61 project finance transactions closed in July throughout the Company's eligible jurisdictions, worth $28.9bn in aggregate. Notable transactions during the month include:

·      A €1.2bn refinancing of the M25 Widening (102 km) PPP in the United Kingdom;

·      A $315m primary financing of the 235MW Overturingen Wind Farm in Sweden;

·      A $146m primary financing of the 50MW Curtis-Teixeiro Biomass Power Plant in Spain;

The US economy added 157,000 jobs in July, bringing the unemployment rate down to 3.9%. GDP growth for Q2 was on track for a 4.1% annual growth rate.

The Eurozone Q2 2018 economic growth rate was revised downward to 0.3%, which is its lowest growth rate assumption in two years.

The Bank of England raised UK interest rates to 0.75%, the highest rate since March 2009, and estimates of Q2 2108 GDP growth were 0.4%, on track for the forecast 1.3% annual growth for the year.

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

LEI: 2138006OW12FQHJ6PX91

For further information please contact:

Sequoia Investment Management Company                           +44 (0)20 7079 0480

Steve Cook

Dolf Kohnhorst

Randall Sandstrom

Greg Taylor

Stifel Nicolaus Europe Limited                                                +44 (0)20 7710 7600

Neil Winward

Mark Bloomfield

Gaudi Le Roux

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

James Macey White

Martin Pengelley

Elizabeth Snow 

Praxis Fund Services Limited (Company Secretary)               +44 (0) 1481 755530

Matt Falla                                                                     

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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