TIDMSEQI
RNS Number : 6838P
Sequoia Economic Infra Inc Fd Ld
14 October 2019
14 October 2019
Sequoia Economic Infrastructure Income Fund Limited
("SEQI" or the "Company")
Net Asset Value as at 30 September 2019 and Investment
Update
The NAV for SEQI, the specialist investor in economic
infrastructure debt, increased to 105.30p from the prior month's
NAV of 104.62p per share. The changes in NAV arose primarily
through:
-- Interest income net of expenses of 0.59p;
-- A decrease of 0.07p in asset valuations;
-- Unhedged FX losses of 0.29p; and
-- Gain of 0.45p from issuing shares at a premium to NAV.
On 20 September 2019, the Company announced that its placing of
shares was significantly oversubscribed, raising gross proceeds of
GBP138.75m. On 30 September 2019, the Company deployed
substantially all the placing proceeds to repay c. GBP136.6m of
outstanding debt, resulting in a month-end cash balance of GBP70.5m
and outstanding debt balance of GBP63.4m. The Company also had
undrawn commitments and three additional investments in settlement
collectively valued at GBP137.3m.
The Company's invested portfolio comprised 62 private debt
investments and 16 infrastructure bonds across 8 sectors and 30
sub-sectors and 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 4.2 years. Private debt
investments represented 88.4% of the total portfolio and 72.0% of
the portfolio comprised floating rate assets. The weighted average
purchase price of the Company's investments was 95.3% of par.
Investments which are pre-operational represented 15.7% of total
assets.
The Company's invested portfolio remains geographically diverse
with 49% located across the US, 16% in the UK, 28% in Europe, and
8% 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 93.1% 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 September
include:
-- A $49m primary loan to Nasco Helium, a company that
specialises in the extraction and processing of helium from
productive oilfields;
-- An additional $5.0m secondary loan acquisition of Heritage
Power, a holding company that owns a portfolio of 16 power plants
located across Pennsylvania, Ohio, and New Jersey, USA;
-- An additional $3.0m secondary loan acquisition of Midcoast
Energy, a highly contracted NGL pipeline system in Texas, USA;
-- An additional $1.8m disbursement to Bourzou Equity LLC, a
company created for the construction of a data center in Virgina,
USA; and
-- A final EUR272k disbursement to Hatch Student Housing in Cork, Ireland.
The following investments were repaid in September in line with
expectations:
-- EUR35.5m and 2.3m Polish z oty senior loans to Project
Warsaw, a portfolio of solar-powered generation assets in
Poland.
Ordinary Portfolio Summary (15 largest settled investments)
Investment name Currency Type Ranking Value Sector Sub-sector Yield
GBPm(1) to maturity
/ worst
(%)
Hawaiki Mezzanine Undersea
Loan USD Private Mezz 60.4 TMT cable 11.6
Salt Creek Midstream USD Private Senior 55.9 Utility Midstream 8.1
Tracy Hills TL Residential
2025 USD Private Senior 48.8 Other infra 10.0
Scandlines Mezzanine
2032 EUR Private HoldCo 46.4 Transport Ferries 5.8
Euroports 2nd
Lien 2026 EUR Private Mezz 44.2 Transport Port 7.8
Nasco Senior Industrial
Secured 2020 USD Private Senior 41.4 Other infra 2.6
Bannister Senior
Secured GBP Private Senior 41.2 Accomm. Health care 8.4
Adani Abbot HoldCo
2021 AUD Private HoldCo 41.2 Transport Port 9.0
Kaveh Senior
Secured TL 2021 USD Private Senior 40.7 TMT Data centers 7.8
Whittle Schools Private
B USD Private Senior 40.5 Other schools 10.9
Bizkaia TL 2021 EUR Private HoldCo 37.9 Power Elec. generation 7.7
Aquaventure USD Private Senior 36.6 Utility Water 8.0
Heritage Power USD Private Senior 35.7 Power Elec. generation 8.6
Bulb Senior TL Electricity
2021 GBP Private Senior 35.0 Utility supply 7.2
Solar &
Sunrun Hera 2017-B USD Private Mezz 32.1 Renewables wind 7.8
Note (1) - excluding accrued interest
Market Summary
A total of 85 project finance transactions closed in September
throughout the Company's eligible jurisdictions, worth $31.4bn in
aggregate. Notable transactions outside of the Company's investment
activities during the month include:
-- A CAD $900m bond issue to finance the operations of the
Greater Toronto Airports Authority in Toronto, Canada;
-- A $508m financing of the construction of a 200MW wind farm in
South Dakota, USA; and
-- A $565m refinancing of the 644MW Bayonne Energy Center in New
Jersey, USA.
In September, the US economy added 136,000 new jobs, bringing
the unemployment rate down to 3.5%. The jobs report was below
expectations, but past months' estimates were revised higher,
leading to the decline in the unemployment rate. There remain
concerns about the strength of the economy so the Fed is expected
to cut interest rates by another quarter point.
The ECB announced a new stimulus plan during the month, cutting
interest rates and resuming bond buying. The Eurozone economy as a
whole is expected to grow 0.1% during Q3 2019.
The UK economy remains weak, with job decreases across the
services, construction, and manufacturing industries. This has
continued fears of a recession, with concerns that the economy has
contracted in Q3.
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 755530
Matt Falla
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.
END
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