SQN Asset Finance Income Fund Ltd Monthly Net Asset Value and Covid-19 update (8395K)
24 Aprile 2020 - 3:23PM
UK Regulatory
TIDMSQN
RNS Number : 8395K
SQN Asset Finance Income Fund Ltd
24 April 2020
24 April 2020
SQN Asset Finance Income Fund Limited
Monthly Net Asset Value and Covid-19 Update
SQN Asset Finance Income Fund Limited (the "Company"), provides
the following monthly net asset value ("NAV") and general update on
the impact of Covid-19 on the portfolio.
Net Asset Value and Performance
As at 31 March 2020, the unaudited estimated NAV per Ordinary
Share was 69.82 pence.
As at 31 March 2020, the unaudited estimated NAV per C Share was
97.00 pence .
The Company also announces the cumulative NAV total return(1)
performance as at 31 March 2020, as follows:
Share class Month-to-month 1 year return 3 year return Return since
return inception
Ordinary shares (1.27)% (21.53)% (11.68)% 4.73%
C shares (0.30)% 6.55% 14.21% 14.07%
Shareholders should note that the hedging of non-Sterling
balances into Sterling has been lifted and, therefore, the returns
during March contain some foreign exchange impacts.
Impact of Covid-19
The Investment Managers have been actively engaged with most of
the counterparties in the portfolio. The majority of borrowers and
lessees have sufficient cash flow to continue to make payments
though all companies have adopted cash-conservation strategies
based on the uncertain timelines that restrictions on economic
activity will be in place.
Against this backdrop, we are able to report that the majority
of payments due in March were received as expected. The notable
exceptions were the payments due on the loans secured by marine
vessels with a single counterparty. The Investment Managers had
already been working with this group of companies to improve the
loan to value of this investment as weakness in the vessel market
preceded the emergence of Covid-19 which has then contributed to
further weakness. The Investment Managers will continue to work
with the borrower through this period and closely monitor the
collateral package.
The Company has a solid track record in lending against marine
vessels even in distressed periods. The Company realized a
compounded return in excess of 9% on the four multiple vessels that
were previously restructured. On 8 April 2020, the Company was able
to conclude the sale of an unrelated marine vessel that was
previously the subject of a restructuring and repositioning with a
new operator. The sale resulted in the Company receiving cash
proceeds in excess of the outstanding investment balancing making
it the 12(th) restructured transaction to deliver a premium over
the originally targeted return upon final disposition.
The Company has previously adopted a policy, in accordance with
IFRS 9, to record provisions against transactions where there is
the increased potential for a credit loss. The majority of the
counterparties reporting an expected delay in payments already had
been identified as Stage 2 or Stage 3 investments and provisioned
for accordingly. These include, among others, the restructured
lease for the papermill in Scotland and the automobile parts
manufacturing equipment in France. The Investment Managers do not
believe further provisions are required, at this time, for any of
the investments in this category.
Two investments without previous provisions have engaged with
the Investment Managers seeking temporary relief on principal and
interest payments due to the Company. One of those is a recycling
business which has experienced a severe reduction in activity. It
is expected that this business will return to normal operations
once restrictions are lifted.
The other investment is in remote operated vehicles which are
currently being utilised in the offshore oil industry. The dual
effect of lower oil prices and Covid-19 has resulted in a temporary
decrease in utilisation and a slowdown in payments received by the
lessee. The underlying assets are versatile and long-lived with
applications across multiple industries. Should a repositioning be
necessary, the secondary market should support the Company's
investment over the long-term.
Performance Footnote(1)
The NAV total return details the change in NAV from the start of
the relevant period and assumes that dividends paid to shareholders
are reinvested at NAV.
Factsheet
The Company's factsheet for March 2020 will shortly be available
on the website:
www.sqncapital.com/managed-funds/sqn-asset-finance-income-fund
.
For further information please contact:
SQN Capital Management, LLC
Jeremiah Silkowski jsilkowski@sqncapital.com
Nicola Bird nbird@sqncapital.com
Catherine Halford Riera chalford@sqncapital.com 01932 575 888
Winterflood Securities Limited 020 3100 0000
Neil Langford
Chris Mills
Buchanan
Charles Ryland
Victoria Hayns
Henry Wilson 020 7466 5000
Notes to Editor
The Company invests in equipment lease and asset finance
arrangements across a diverse portfolio of assets and industries
predominantly in the UK, Northern Europe and US. The Company
focuses on business-essential, revenue-producing (or cost saving)
equipment and other assets with high in-place value and long
economic life relative to the investment term.
The Company's Investment Managers are SQN Capital Management,
LLC, a Registered Investment Advisor with the United States
Securities and Exchange Commission and its subsidiary, SQN Capital
Management (UK) Limited. The principal responsible for managing the
portfolio is Jeremiah Silkowski.
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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