Sequoia Economic Infrastructure Income Fund Ltd.

Net Asset Value • Jan 15, 2020

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RNS Number : 7963Z

Sequoia Economic Infra Inc Fd Ld

15 January 2020

15 January 2020

Sequoia Economic Infrastructure Income Fund Limited

("SEQI" or the "Company")

Net Asset Value as at 31 December 2019 and Investment Update

The NAV for SEQI, the specialist investor in economic infrastructure debt, increased to 106.32p from the prior month's NAV of 104.87p per share. The changes in NAV arose primarily through:

·      Interest income net of expenses of 0.92p;

·      An increase of 0.55p in asset valuations; and

·      Unhedged FX losses of -0.02p.

As at 31 December 2019, the Company had cash of £55.8m and had drawn £224m on its £280m Revolving Credit Facility. The Company also had undrawn commitments on existing investments collectively valued at £92.7m.

The Company's invested portfolio comprised of 69 private debt investments and 13 infrastructure bonds across 8 sectors and 32 sub-sectors. It had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.2% and a weighted average life of approximately 4.0 years. Private debt investments represented 92% of the total portfolio and 71% of the portfolio comprised floating rate assets. The weighted average purchase price of the Company's investments was 96.5% of par. Investments which are pre-operational represented 13.1% of total assets.

The Company's invested portfolio remains geographically diverse with 44% located across the US, 20% in the UK, 30% in Europe, and 6% in Australia/New Zealand. Currently the Company is not investing in Portugal or Italy but has selectively invested in opportunities in Spain. The Company's pipeline of economic infrastructure debt investments remains strong and is diversified by sector, sub-sector, and jurisdiction.

At month end, approximately 98% 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 €40.0m primary senior loan to Care4U Invest, an Irish residential and day services provider for adults with an intellectual disability;

·      A €30.0m primary holdco loan to Kenai Capital Markets, a German logistics and industrial park owner;

·      A £20.0m primary senior loan to Prism Bidco Ltd, a portfolio of ten neurorehabilitation care homes in the UK;

·      An initial $5.0m primary holdco loan to Sunrun Radcliffe, a leader in the US residential solar market;

·      An additional $2.8m disbursement to Bourzou Equity, a company created for the construction of a data centre in Virginia;

·      An additional $2.8m disbursement to Project Swordfish, a company that operates waterbus passenger transport systems in Antwerp.

The following investments were sold or prepaid in December:

·      $24.5m of Midcoast Energy's TL B;

·      €14.2m of Neoen Production's mezzanine loan; and

·      £8.3m of Euro Garages TL B.

Ordinary Portfolio Summary (15 largest settled investments)

Investment name	Currency	Type	Ranking	Value £m(1)	Sector	Sub-sector	Yield to maturity / worst (%)
AP Wireless Junior	EUR	Private	Mezz	57.6	TMT	Telecom towers	6.2
Hawaiki Mezzanine Loan	USD	Private	Mezz	56.0	TMT	Undersea cable	11.7
Salt Creek Midstream	USD	Private	Senior	51.7	Utility	Midstream	7.8
Tracy Hills TL 2025	USD	Private	Senior	44.3	Other	Residential infra	9.8
Scandlines Mezzanine 2032	EUR	Private	HoldCo	43.9	Transport	Ferries	5.9
Euroports 2nd Lien 2026	EUR	Private	Mezz	42.2	Transport	Port	7.8
Bannister Senior Secured	GBP	Private	Senior	41.2	Accomm.	Health care	8.4
Adani Abbot HoldCo 2021	AUD	Private	HoldCo	39.7	Transport	Port	9.4
Kaveh Senior Secured TL 2021	USD	Private	Senior	37.7	TMT	Data centers	7.5
Corral HoldCo 2024	USD	Private	HoldCo	37.7	Other	Refinery	11.2
Bizkaia TL 2021	EUR	Private	HoldCo	37.6	Power	Elec. generation	7.7
Whittle Schools B	USD	Private	Senior	37.5	Other	Private schools	10.8
Nasco Senior Secured 2020	USD	Private	Senior	37.1	Other	Industrial infra	7.6
Warnow Tunnel	EUR	Private	Senior	35.6	Transport	Road	6.7
Bulb Senior TL 2021	GBP	Private	Senior	35.0	Utility	Electricity supply	7.1

Note (1) - excluding accrued interest

Market Summary

A total of 72 project finance transactions closed in December throughout the Company's eligible jurisdictions, worth $30.46 bn in aggregate. Notable transactions outside of the Company's investment activities during the month include:

·      €2.4bn acquisition of a 36% stake in Brussels Airport, Belgium;

·      A $326.3m financing for the development and construction of a 217MW portfolio of solar PV assets around the United States; and

·      A €38.5m refinancing of Blue Elephant Energy's 26MW solar PV portfolio in Italy.

The US economy is believed to have added 160,000 jobs in December, with an unemployment rate of 3.5%. GDP growth for Q3 remained unrevised, at 2.1%, and the Fed believes GDP growth for Q4 2019 was 2.3%.

The Eurozone economy is estimated to have grown 1.1% in 2019, with the ECB continuing its program of quantitative easing through to 2020.

The UK economy is estimated to have grown 0.2% in Q4 2019, for total 2019 growth of 1.3% and predicted growth in 2020 of 1.0%.

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

Jefferies International Limited                                                       +44 (0)20 7029 8000

Gary Gould

Stuart Klein

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

Katrina Rowe                                                                                       

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.

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