TIDMSEQI
RNS Number : 0320L
Sequoia Economic Infra Inc Fd Ld
14 July 2017
14 July 2017
Sequoia Economic Infrastructure Income Fund Limited
Net Asset Value as at 30 June 2017 and Investment Update
Ordinary Share update
SEQI's NAV increased to 101.34p per share from 101.22p per share
on 31st May 2017 which arose primarily through:
-- Interest income net of expenses of 0.42p;
-- A decrease of 0.04p in asset valuations;
-- A decrease of 0.25p from FX movements;
During June, the Company had invested or committed to invest a
total of GBP72.1m which resulted in the total invested portfolio
representing approximately 77.9% of the Company's NAV as of the
30th June 2017. At month-end, the Company had gross leverage of
GBP40m which has been drawn and partially deployed, and represents
approximately 5.3% of NAV.
The portfolio held 29 private debt investments and 17
infrastructure bonds for a total of 46 investments that covered 8
sectors and 24 subsectors, and are collectively valued at GBP567.2m
including accrued interest with an annualised yield-to-maturity (or
yield-to-worst in the case of callable bonds) of 7.7% and a
weighted average life across the acquired portfolio of
approximately 4.8 years.
The weighted average purchase price of the Company's acquired
investments was approximately 96.5% of par, and of those, only 14%
had some form of construction risk.
During June, Sterling fell slightly against the Euro but rose
sharply against the Dollar, ending the month at EUR1.1398 and
$1.3025 respectively, and the Bloomberg USD High Yield Corporate
Bond Index fell slightly to 178.4. As of the 30th June 2017,
approximately 88% 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. Each of its FX hedge
providers has credit lines to the Company which means that the
margin calls on the hedge portfolio have been modest.
Approximately 44% of the invested portfolio comprises floating
rate assets, with only two LIBOR floors above current LIBOR levels
(EUR). As such, the portfolio's yield is likely to rise over time
as LIBOR increases. The Company expects the floating rate
proportion to exceed 50% once the proceeds of the recent equity
issue are deployed.
The Company's investment activities during June include:
-- First drawdown of GBP8.3m for the construction of a student housing development in Glasgow;
-- The primary participations in the Apollo Aviation 2017-1 C
notes and the Heathrow 3.875% 2027 bonds, whose par values amount
to $7.5m and GBP10m respectively;
-- Incremental investments in the following assets:
o $3.6m of Apollo Aviation 2016-2 C notes;
o $12.5m of IO Data Centers loan;
o $5m of Global Ship Lease 10% 2019 bonds;
o $7m of Talen Energy's 6.5% 2025 bonds;
Lastly, the GBP30mm FC Beamish Bidco deal prepaid in June which
was in-line with the Company's expectations.
Ordinary Portfolio Summary (15 largest settled investments)
Transaction Currency Type Ranking Value Sector Sub-sector Yield
name GBPm(1) to
maturity
/ worst
(%)
IO Data Centers Data
LLC USD Private Senior 38.4 TMT Centers 9.00
A'lienor
S.A.S. (A65) EUR Private Senior 38.0 Transport Road 3.29
AP Wireless
Infrastructure GBP Private Senior 33.0 TMT Towers 6.31
Waste
Cory Environmental GBP Private HoldCo 32.7 Utilities to Energy 8.50
Abteen Ventures Data
LLC USD Private Senior 26.9 TMT Centers 8.00
Regard Group Health
Mezzanine GBP Private Mezz 23.6 Accommodation Care 12.06
Exeltium
Mezzanine EUR Private Mezz 20.5 Power PPA 12.39
Natgasoline Industrial
Senior Unsecured USD Private Mezz 20.2 Other Infrastructure 10.00
Welcome Break Motorway
No.1 Ltd GBP Private Mezz 18.3 Transport Services 8.33
NGG Finance Electricity
5.625% 2073 GBP Public Mezz 17.0 Utilities Distribution 3.63
Solar
Neoen Production EUR Private HoldCo 16.6 Renewables & Wind 7.00
Cheniere
Corp Christi
7% 2024 USD Public Senior 12.8 Transport Ports 4.93
NRG Energy
Inc 7.25% Electricity
2026 USD Public Senior 12.7 Power Generation 6.58
GFL 9.875%
2021 USD Public Senior 12.5 Utility Waste 3.45
Green Plains Alternative
TL B USD Private Senior 12.3 Other Fuel 6.60
Note (1) - excluding accrued interest
Market Summary
A total of 17 project finance transactions closed in June
throughout the Company's eligible jurisdictions, and worth, in
aggregate, $4.05bn. Notable transactions include the South Western
Rolling Stock project to purchase trains for South Western in the
UK, which received GBP1,015m of financing of which GBP895m was
debt, and the 365MW Vortex UK Solar PV Portfolio Refinancing, which
received GBP355m in debt funding.
Eurozone growth was strong in June, with unemployment throughout
the region at an eight year low and factory activity at a six year
high. While inflation was still below the 2 per cent target, Mario
Draghi signalled that the ECB may begin to tighten its economic
policy.
The Federal Reserve raised rates in the middle of the month and
signalled that they may increase rates once more during 2017. The
unexpected outcome of the General Election led to more uncertainty
about the direction the British economy will take.
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
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