Sequoia Economic Infrastructure Income Fund Ltd.

Net Asset Value • Apr 18, 2017

National Storage Mechanism | Additional information

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

RNS Number : 5073C

Sequoia Economic Infra Inc Fd Ld

18 April 2017

18 April 2017

Sequoia Economic Infrastructure Income Fund Limited

Net Asset Value as at 31 March 2017 and Investment Update

Ordinary Share update

During March, the Company had invested or committed to invest a total of £69.5m which resulted in the total invested portfolio representing approximately 98.5% of the Company's NAV as of the 31st March 2017.

The portfolio held 30 private debt investments and 15 infrastructure bonds for a total of 45 investments that covered 8 sectors and 25 subsectors, and are collectively valued at £600.3m including accrued interest with an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.3% 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 96.3% of par.

As of the 31st March 2017, the Company had gross leverage of £40m which has been drawn and partially deployed, and represents approximately 6.5% of NAV. In the four months following the December Placing, the Company has deployed approximately £140m, or 111%, of the £126m gross proceeds plus part of the leverage facility. The Company is confident in its ability to deploy capital and continues to see an attractive pipeline of opportunities.

Approximately 49.8% of the invested portfolio comprises floating rate assets, with only two LIBOR floors above current LIBOR levels (both of which are EUR). 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, aircraft and ship leasing. Of the Company's acquired investments, only 12% had some form of construction risk as of the 31st March 2017.

The Company's investment activities during March include:

·       A direct origination for a £32.7m junior debt facility for Cory Riverside Holdings, a UK-based residual waste-to-energy company;

·       A bilateral loan of €6.8m for the construction of a Dutch student housing building in Leiden, of which €3.1m was drawn at close, and an additional €0.7m was added to the sponsor's other student housing transaction in The Hague;

·       The purchase of $15.0m of 7.0% 2024 bonds issued by Cheniere Corpus Christi, a key LNG export terminal that is currently under construction;

·       A $10.0m investment of NRG Energy Inc 6.625% 2027 bonds, which is in addition to the current holding of NRG's 7.25% 2026 bonds.

·       An incremental investment £5.0m of NGG Finance's 5.625% 2073 bonds

Sterling rallied significantly at the end of March against both the Euro and the Dollar, ending the month at €1.1778 and $1.255 respectively. As of the 31st March 2017, approximately 80.0% of NAV consisted of either Sterling assets or was hedged into Sterling.

The decrease in SEQI's NAV to 102.72p per share from 102.88p in February 2017 arose primarily through:

·       Interest income net of expenses of 0.41p;

·       A decrease of 0.05p in asset valuations; and

·       A decrease of 0.52p from FX movements.

The Investment Adviser notes that approximately -0.38p of the -0.52p FX movement is attributable to a discrepancy between the valuation of the FX hedging book which is undertaken at close of business in London, and the valuation of the Company's portfolio which uses rates as at the close of business in New York. Given Sterling's rally after close of business in London, there was a technical reduction (for valuation purposes) of the Company's net assets which would reconcile with the hedges the following trading day.

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	37.1	Transport	Road	3.56
AP Wireless Infrastructure	GBP	Private	Senior	32.8	TMT	Towers	12.49
Cory Riverside	GBP	Private	HoldCo	32.6	Utilities	Waste to Energy	8.59
IO Data Centers LLC	USD	Private	Senior	29.9	TMT	Data Centers	9.00
Beamish HoldCo 2017	GBP	Private	Senior	29.9	Accommodation	Health Care	11.39
Abteen Ventures	USD	Private	Senior	27.9	TMT	Data Centers	8.00
Regard Group Mezzanine	GBP	Private	Mezz	23.3	Accommodation	Health Care	12.12
Natgasoline Senior Unsecured	USD	Private	Mezz	20.9	Other	Industrial Infrastructure	9.99
Exeltium Mezzanine	EUR	Private	Mezz	18.7	Power	PPA	9.40
Welcome Break No.1 Ltd	GBP	Private	Mezz	18.3	Transport	Motorway Services	8.35
NGG Finance 5.625% 2073	GBP	Public	Mezz	16.6	Utilities	Electricity Distribution	4.03
Neoen Production	EUR	Private	HoldCo	16.0	Renewables	Solar & Wind	6.99
Bristow Group 6.25% 2022	USD	Public	Mezz	15.5	Transport Assets	Aircraft	10.91
Danaos Snr Secured 2018	USD	Private	Senior	14.4	Transport Assets	Shipping	15.94
Alinta Energy TL B	USD	Private	Senior	13.4	Utilities	Elec Supply	6.73

Note (1) - excluding accrued interest

Market Summary

March was another active month in the infrastructure finance space, with over 57 transactions reaching financial close across the US and Western Europe. One transaction of note was the $890m development financing of the 1050 MW CPV Fairview Energy Center in Pennsylvania which will be a natural gas and ethane-fuelled combined-cycle electric generating station.

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

NAVBUGDSISBBGRX