Sequoia Economic Infrastructure Income Fund Ltd.

Net Asset Value • Feb 12, 2016

National Storage Mechanism | Additional information

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RNS Number : 8405O

Sequoia Economic Infra Inc Fd Ld

12 February 2016

12 February 2016

Sequoia Economic Infrastructure Income Fund Limited

Net Asset Value as at 29 January 2016 and Investment Update

Ordinary Share update

As of the 29th January 2016, the Ordinary share class held 13 infrastructure bonds and 13 private debt investments, collectively valued at £143.3m including accrued interest, with an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.5% and a weighted average life across the acquired portfolio of approximately 6.6 years.

Approximately 46% of the Ordinary Share portfolio comprises floating rate assets, with only two LIBOR floors (other than those at zero percent). As such the portfolio's yield is likely to increase over time as LIBOR increases.

The investments are across the UK, Western Europe, Australia, Canada and the US and include the road, rail, utility, power, shipping, renewables and aircraft leasing sectors.

In January, the Company sold its entire position in the NRG Energy Inc 6.25% 2024  bonds and reinvested the proceeds in the NRG Energy Inc 7.875% 2021 bonds, maintaining the position's yield to maturity but picking up 38bps on its spread to Treasuries and reducing its modified duration from 5.9 to 4.1.

The small decrease in the Ordinary Share NAV to 96.38p (ex-div) from 96.50p per share arose primarily through:

· Interest income net of expenses of 0.43p;

· A gain of 1.02p on net FX movements;

· A decline of 0.07p in asset valuations; and

· A dividend declared of 1.5p on 21 January 2016 (expected to be paid on 29 February 2016).

Ordinary Share Portfolio Summary (ten largest investments)

Transaction name	Currency	Type	Ranking	Value £mm (1)	Sector	Sub-sector	Yield to maturity / worst (%)
Neoen Production 1 S.A.S.U	EUR	Private	HoldCo	14.8	Renewables	Solar & Wind	7.00
Biffa TL A	GBP	Private	Senior	12.9	Utility	Waste	6.66
Exeltium Mezzanine	EUR	Private	Mezz	12.0	Power	PPA	8.60
Danaos Snr Secured 2018	USD	Private	Senior	9.1	Transport assets	Shipping	8.14
Dulles Greenway 2029	USD	Public	Senior	9.0	Transport	Road	6.33
North Las Vegas Water 6.572% 2040	USD	Public	Senior	7.7	Utility	Water	7.34
Invenergy TL B	USD	Private	Senior	7.0	Power	Electricity Generation	6.41
Green Plains TL B	USD	Private	Senior	6.8	Other	Alternative fuel	6.79
Global Ship Lease 10% 2019	USD	Public	Senior	5.7	Transport assets	Shipping	18.17
Ascendos Rail 2nd lien	EUR	Private	Mezz	5.5	Transport assets	Rolling Stock	5.09

Note (1) - excluding accrued interest

C Share update

At month end, the C Share class held 10 infrastructure bonds and 10 private debt investments, with a further two bonds in the process of settlement. These assets are collectively valued at £126.3m(3), 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 4.1 years.

The investments are geographically diverse and cover the road, rail, aircraft and shipping leasing, power, renewable, utility and elderly care sectors.

Investments in January include:

· Enable Midstream Partners, a US midstream gas company that focuses on transportation and storage services;

· Dulles Greenway, a US toll road;

· DBB Jack-up Services A/S, an offshore wind maintenance service provider;

· Care UK, a UK healthcare provider; and

· NRG Energy Inc., an independent, US-based power generation company.

The Investment Adviser continues to see attractive opportunities for the deployment of capital in the economic infrastructure debt sector, and expects the overall yield on the C Share portfolio to be approximately 8% or higher.

As announced on 3 February 2016, the C Share register is expected to close at 5.30pm on 2 March 2016, following which the C Shares will convert into new Ordinary Shares and dealings in these new Ordinary Shares is expected to commence on 3 March 2016. All monthly reports after conversion will thus pertain only to the Ordinary Shares, with the C Share listing cancelled from 3 March 2016.

The increase in the C Share NAV to 99.99p from 99.56p per share arose primarily through:

· Interest income net of expenses of 0.26p;

· A gain of 0.88p on net FX movements; and

· A decline of 0.71p in asset valuations.

C Share Portfolio Summary (ten largest investments)

Transaction name	Currency	Type	Ranking	Value £mm (2)	Sector	Sub-sector	Yield to maturity / worst (%)
A'lienor S.A.S. (A65)	EUR	Private	Senior	27.5	Transport	Road	5.80
Infinis Bridge	GBP	Private	HoldCo	24.0	Renewables	Solar & Wind	8.91
Danaos Snr Secured 2018	USD	Private	Senior	9.4	Transport assets	Shipping	8.14
Castlelake 2015-1 C	USD	Public	Mezz	6.8	Transport assets	Aircraft	9.9
Reliance Rail Finance 2018	AUD	Private	Senior	6.0	Transport assets	Rolling Stock	7.28
Exeltium Mezzanine	EUR	Private	Mezz	5.6	Power	PPA	8.60
Intelsat Jackson 7.25% 2019	USD	Public	Senior	5.1	TMT	Satellites	10.96
NRG Energy Inc 7.785% 2021	USD	Public	Senior	4.5	Power	Elec Generation	11.75
GFL  7.5% 2020	CAD	Public	Senior	3.9	Utility	Waste	8.68
Reliance Rail Finance 2019	AUD	Private	Senior	3.6	Transport assets	Rolling Stock	7.06

Note (2) - excluding accrued interest (3) - including accrued interest, and with investments in the process of settlement valued at cost

Market Summary

January showed some activity in the infrastructure debt sector with 11 transactions closing across the UK and Western Europe. Notable deals included the €500mm primary debt financing of the A94 Forstinning-Marktl Road project in Germany, and the €146mm bond financing of the N25 New Ross Bypass in Ireland.

Sterling fell materially from $1.48 to $1.42 against the US dollar in January but strengthened slightly against the euro, with one euro worth £0.74 at the end of January, compared with £0.76 at the end of December.

The Fed kept interest rates unchanged as volatility in the global equity markets dominated the newsflow in January. Inflation in the Eurozone accelerated to 0.4% in January from 0.2%.

The credit markets experienced a continued and severe reduction in appetite for riskier assets, as shown by widening spreads at all ratings categories. The Bloomberg USD High Yield Corporate Bond Index fell to 142 from 145, following a moderate decline in December.

As part of a "flight to quality", 10-year US Treasury yields fell by 35 bps from 2.27% to 1.92%.

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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