Sequoia Economic Infrastructure Income Fund Ltd.

Net Asset Value • Jan 15, 2019

National Storage Mechanism | Additional information

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

RNS Number : 0600N

Sequoia Economic Infra Inc Fd Ld

15 January 2019

15 January 2019

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Company")

Net Asset Value as at 31 December 2018 and Investment Update

The NAV for SEQI, the specialist investor in economic infrastructure debt, increased to 101.78p from the prior month's NAV of 101.34p. The changes in NAV arose primarily through:

·      Interest income net of expenses of 0.60p;

·      A decrease of 0.18p in asset valuations; and

·      An increase of 0.03p from FX movements.

During the month, the Company drew £55.7m on its Revolving Credit Facility which is expected to be deployed into its pipeline of investment opportunities. The Company's cash balance after deducting net borrowings of £55.7m was £14.3m, with total net assets of £1.1bn at month end. The Company also had undrawn commitments, and three additional investments in settlement, collectively valued at £188.6m.

The Company's invested portfolio comprised of 43 private debt investments and 20 infrastructure bonds across 8 sectors and 24 sub-sectors and had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.8% and a weighted average life of approximately 5.4 years. Private debt investments represented 85.3% of the total portfolio and 65.4% of the portfolio comprised floating rate assets. The weighted average purchase price of the Company's investments was c. 97.1% of par. Investments which are pre-operational represented 15.9% of total assets.

The Company's invested portfolio remains geographically diverse with 48% located across the US, 15% in the UK, 28% in Europe, and 10% 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 December 2018, approximately 99% of the Company's 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.

The Company's settled investment activities during December include:

·      A $35.7m initial primary disbursement to Epic Midstream, a midstream oil and gas company that is constructing two pipelines from the Permian Basin to Corpus Christi, Texas;

·      A $20m secondary purchase of General Electric's 5% perpetual bonds, an equipment manufacturer that is shifting its focus to the power, renewables, and aviation sectors;

·      An additional $10m secondary loan purchase of Midcoast Energy's TL B;

·      An additional $5m disbursement to Whittle Schools in Washington, D.C.;

·      An additional $5m secondary purchase of Terra-Gen's term loan maturing in 2021;

·      An additional €2m primary investment in Hatch Student Housing in Ireland;

·      An additional €1.7m secondary purchase of Ziton's variable rate 2021 bonds;

·      An additional £650k secondary purchase of Voyage Care 5.875% 2023 bonds;

·      An additional NOK1.0m secondary purchase of Exmar variable rate 2019 bonds.

No investments were sold, called, or prepaid during December.

Ordinary Portfolio Summary (15 largest settled investments)

Investment name	Currency	Type	Ranking	Value £m(1)	Sector	Sub-sector	Yield to maturity / worst (%)
Hawaiki Mezzanine Loan	USD	Private	Mezz	55.5	TMT	Undersea cable	11.8
Salt Creek Midstream	USD	Private	Senior	54.9	Utility	Midstream	8.0
Tracy Hills TL 2025	USD	Private	Senior	47.1	Other	Residential infra	10.5
Scandlines Mezzanine 2032	EUR	Private	HoldCo	44.9	Transport	Ferries	6.5
Bannister Senior Secured	GBP	Private	Senior	42.0	Accomm.	Health care	7.9
Adani Abbot HoldCo 2021	AUD	Private	HoldCo	41.4	Transport	Port	9.2
Bizkaia TL 2021	EUR	Private	HoldCo	37.0	Power	Elec. generation	7.7
Aquaventure	USD	Private	Senior	35.3	Utility	Water	8.3
Project Warsaw	EUR	Private	Senior	32.2	Renewables	Solar & wind	5.9
Sunrun Hera 2017-B	USD	Private	Mezz	31.4	Renewables	Solar & wind	7.5
Seaport TL B	USD	Private	Senior	31.2	Transport	Port	8.4
Sacramento Data Centre	USD	Private	Senior	28.6	TMT	Data centers	11.0
Epic Midstream	USD	Private	Senior	28.0	Utility	Midstream	8.4
Abteen Ventures	USD	Private	Senior	27.7	TMT	Data centers	5.0
EIF Van Hook TL B 2024	USD	Private	Senior	26.2	Utility	Midstream	8.8

Note (1) - excluding accrued interest

Market Summary

A total of 59 project finance transactions closed in December throughout the Company's eligible jurisdictions, worth $22.6bn in aggregate. Notable transactions during the month include:

·      A £1.4bn refinancing of the Dugeon offshore wind farm in the United Kingdom;

·      CAD 239m PPP for the redevelopment of the Rutherford GO station in Ontario, Canada;

·      A €250m revolving facility for TDF, an internet network services provider in France.

In the US, rising interest rates and trade tensions with China continued to weigh on investor confidence at the end of 2018. Global growth concerns were compounded by hawkish comments from the Federal Reserve which would further stress an already-stretched credit market in the US, particularly in the leveraged loan space. Rate rises are contributing to a strengthening Dollar, especially against the Pound, ending the month at 1.2746 GBP/USD. 

UK retail sales were higher in November on the back of Black Friday sales, but fell in December after a weak Christmas period as Brexit continues to impact consumer confidence. Mark Carney also presented a bearish assessment of the Brexit uncertainty which eroded any upside for the Pound.

Lastly, Italy's populist government agreed to delay some planned expenditures, thus ending a long-running disagreement with the EU over the feasibility of Italy's proposed budget. European markets responded positively to this development but are still cautious regarding the eurozone's vulnerability to slowing growth and economic problems in China and other emerging markets. GBP ended the month down 1.3% against the Euro at 1.1130.

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.

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact rns@lseg.com or visit www.rns.com.

END

NAVSFAFMLFUSEIF