TIDMSEQI
RNS Number : 9404P
Sequoia Economic Infra Inc Fd Ld
14 February 2019
14 February 2019
Sequoia Economic Infrastructure Income Fund Limited
("SEQI" or the "Company")
Net Asset Value as at 31 January 2019 and Investment Update
The NAV for SEQI, the specialist investor in economic
infrastructure debt, increased to 101.38p from the prior month's
NAV of 100.28p per share (being the 31 December cum-income NAV less
the dividend of 1.5 pence per share declared in respect of the
quarter ended 31 December). The changes in NAV arose primarily
through:
-- Interest income net of expenses of 0.76p;
-- An increase of 0.40p in asset valuations; and
-- A decrease of 0.07p from FX movements.
During the month, the Company deployed the remaining equity
issue proceeds into additional economic infrastructure debt
investments and did not make any further drawings on its Revolving
Credit Facility. The Company's own cash balance after deducting
total net borrowings of GBP55.2m was -GBP5.9m. Company also had
undrawn commitments, and two additional investments in settlement,
collectively valued at GBP188.7m.
The Company's invested portfolio comprised of 49 private debt
investments and 20 infrastructure bonds across 8 sectors and 25
sub-sectors and had an annualised yield-to-maturity (or
yield-to-worst in the case of callable bonds) of 8.7% and a
weighted average life of approximately 5.4 years. Private debt
investments represented 85.2% of the total portfolio and 65.8% of
the portfolio comprised floating rate assets. The weighted average
purchase price of the Company's investments was 96.2% of par.
Investments which are pre-operational represented 16.2% of total
assets.
The Company's invested portfolio remains geographically diverse
with 47% located across the US, 16% in the UK, 27% in Europe, and
10% in Australia/New Zealand. Currently the Company is not
investing in Portugal or Italy but has invested in selective
opportunities in Spain. The Company's pipeline of economic
infrastructure debt investments remains strong and is diversified
by sector, sub-sector, and jurisdiction.
As at 31 January 2019, approximately 97% 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 January
include:
-- An initial GBP10.0m primary loan to Bulb Energy, an electricity supplier in the UK;
-- An additional $7.8m disbursement to Whittle Schools;
-- An additional GBP5.0m secondary purchase of Elysium Healthcare's B1 facility;
-- An additional GBP2.0m secondary purchase of Euro Garages term
loan B, one of the largest motorway service station operators in
the UK; and
-- An additional EUR1.8m secondary purchase of Ziton A/S
floating rate 10/2021 bonds, an offshore wind turbine maintenance
company operating in the North Sea.
No investments were sold, called, or prepaid during January.
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 54.2 TMT cable 11.4
Salt Creek Midstream USD Private Senior 52.6 Utility Midstream 8.5
Tracy Hills TL Residential
2025 USD Private Senior 45.7 Other infra 10.5
Scandlines Mezzanine
2032 EUR Private HoldCo 43.6 Transport Ferries 6.5
Bannister Senior
Secured GBP Private Senior 42.0 Accomm. Health care 8.0
Adani Abbot HoldCo
2021 AUD Private HoldCo 41.6 Transport Port 9.3
Bizkaia TL 2021 EUR Private HoldCo 35.9 Power Elec. generation 7.7
Aquaventure USD Private Senior 34.3 Utility Water 8.3
Solar &
Project Warsaw EUR Private Senior 31.3 Renewables wind 5.9
Seaport TL B USD Private Senior 30.4 Transport Port 8.3
Solar &
Sunrun Hera 2017-B USD Private Mezz 30.1 Renewables wind 8.2
Sacramento Data
Centre USD Private Senior 28.1 TMT Data centers 10.0
Epic Midstream USD Private Senior 27.2 Utility Midstream 8.5
Abteen Ventures USD Private Senior 26.9 TMT Data centers 4.5
Ziton Senior Transport Specialist
Secured 2021 EUR Private Senior 26.4 assets Shipping 6.5
Note (1) - excluding accrued interest
Market Summary
A total of 29 project finance transactions closed in January
throughout the Company's eligible jurisdictions, worth $4.3bn in
aggregate. Notable transactions during the month include:
-- A EUR2.5bn refinancing of the LGV Tours-Bordeaux high speed rail line in France;
-- A EUR493m financing for the Liege Tram PPP in Belgium, which
will be 11.4km of tramline connecting Sclessin and Coronmeuse;
and
-- A EUR150 million mezzanine loan for the EllaLink subsea cable
project linking data centres in Brazil, Portugal, Spain, and
France.
The US economy added 304,000 jobs in January 2019, with the
unemployment rate slightly increasing to 4.0%. US GDP growth is
expected to slow in 2019 to 2.3%, with continued pressure from
tensions with China and the prolonged government shut down in
December and January putting pressure on US economic growth. The
Federal Reserve has indicated that it will put further rate rises
on hold.
Eurozone economic growth has stagnated, with only 0.2% growth in
Q4 2018 and concern that economic growth will slow further. Italy,
the third-largest Eurozone economy, entered a recession, with its
second consecutive quarter of economic contraction. Germany has
also cut its projections for growth to 1.0% from 1.8%.
Amid Brexit fears and a global economic slowdown, UK economic
growth has slowed as well, with only 0.2% growth in Q4 2018 and
1.4% growth for all of 2018, the slowest growth rate since 2012.
The BoE has forecast growth for 2019 at 1.2%.
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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