Sequoia Economic Infrastructure Income Fund Ltd.

Net Asset Value • Feb 14, 2018

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RNS Number : 8056E

Sequoia Economic Infra Inc Fd Ld

14 February 2018

14 February 2018

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Company")

Net Asset Value as at 31 January 2018 and Investment Update

Ordinary Share update

The NAV for SEQI, the specialist investor in economic infrastructure debt, increased to 101.04p per share from 100.31p (ex-dividend) per share on 29 December 2017 which arose primarily through:

·      Interest income net of expenses of 0.60p;

·      An increase of 0.29p in asset valuations;

·      A decrease of 0.16p from FX movements.

The Company's invested portfolio represented 87.1% of the Company's NAV, with an additional £79.6m either traded but not settled or undrawn commitments. The total portfolio, including both acquired assets and assets which the Company has committed to buy but remain unsettled or undrawn, represented 97.6% of the Company's NAV.

The total portfolio comprised a total of 54 investments collectively valued at £745.1m (including accrued interest): 34 private debt investments and 20 infrastructure bonds across 8 sectors and 23 subsectors.

The total portfolio had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 7.9% and a weighted average life of approximately 5.2 years. Private debt investments represented 75% of the total portfolio and 61% of it comprised floating rate assets. The weighted average purchase price of the Company's investments was c.95.3% of par.

Investments which are pre-operational represented 15.9% of total assets.

As at 31 January 2018, approximately 93% 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.

The Company's settled investment activities during January include:

·      A £36.0m primary loan to Active Assistance, provides specialised health care throughout the UK;

·      An additional $27.0m disbursement to Tracy Hills, the residential infrastructure project in Northern California;

·      An additional $7.4m loan to Terra-Gen, a renewable energy company focused on utility-scale wind, solar and geothermal generation;

·      An additional €4.8m disbursement to Project Warsaw, a portfolio of wind farms in Poland;

·      Primary participations of $2.0m and $5.0m of Apollo Aviation 2018-1B and 2018-1C;

·      An additional £1.1m disbursement to the Clyde Street Student Housing development in Glasgow.

Lastly, three investments repaid during the month of January in line with the Company's expectations:

·      IO Data Centres which prepaid its amount due in full equal to $50.0m;

·      The Regard Mezzanine and HoldCo healthcare loans worth £24.4m; and

·      The $11.2m of All Aboard Florida bonds were also called.

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	39.2	Transport	Roads	5.5(2)
Hawaiki Mezzanine Loan	USD	Private	Mezz	37.3	TMT	Undersea Cable	11.6
Active Assistance Group	GBP	Private	Senior	36.4	Accomm.	Health Care	8.4
Tracy Hills TL 2025	USD	Private	Senior	33.8	Other	Residential Infrastructure	9.7
Cory Environmental	GBP	Private	HoldCo	31.3	Utility	Waste-to-energy	8.5
Aquaventure	USD	Private	Senior	24.7	Utility	Water & Waste	7.7
Abteen Ventures	USD	Private	Senior	24.7	TMT	Data Centers	8.0
Warnow Tunnel	EUR	Private	Senior	20.7	Transport	Roads	6.8
Terra-Gen Power TL B	USD	Private	Senior	20.3	Renewables	Solar & Wind	9.4
NatGasoline	USD	Private	Mezz	19.4	Other	Industrial Infra	10.0
Exeltium Mezzanine	EUR	Private	Mezz	19.3	Power	PPA	9.4
Welcome Break No.1 Ltd	GBP	Private	Mezz	18.3	Transport	Motorway Services	8.5
Bulb Energy Senior Secured	GBP	Private	Senior	17.7	Utility	Electricity Supply	9.0
NGG Finance 5.625% 2073	GBP	Public	Mezz	17.1	Utility	Elec. Distribution	3.4
Neoen Production	EUR	Private	HoldCo	15.3	Renewables	Solar & Wind	7.0

Note (1) - excluding accrued interest

Note (2) - Yield-to-date of expected refinancing;

Market Summary

A total of 27 project finance transactions closed in January throughout the Company's eligible jurisdictions, worth $7.4bn in aggregate. Notable transactions during the month include:

·      A CAD $411m primary financing of development of a new patient care tower in Michael Garron Hospital in Toronto;

·      A £40m term loan for the construction of new student housing in Birmingham;

·      A €164m PPP contract given by the City of Cologne to refurbish and expand four schools; and

·      The €135m refinancing of Lestenergia's 144MW Portuguese wind portfolio, designed to pay back existing debt and improve the company's liquidity position.

The equity markets experienced extreme volatility in February, with US VIX more than doubling and the Dow falling 10%. This was triggered by inflationary fears, increasing the risk of the Fed raising rates faster than expected. Equity price weakness has not, however, spilled over to the credit markets with the US CDX high yield index falling by only 1.8% during the same period. Moreover, we have not noticed any material drop in our asset values, as infrastructure debt has a low correlation to the market and is defensive in nature.

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 755528

Shona Darling                                                               

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 company news service from the London Stock Exchange

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