TIDMSEQI
RNS Number : 7905S
Sequoia Economic Infra Inc Fd Ld
14 March 2019
14 March 2019
Sequoia Economic Infrastructure Income Fund Limited
("SEQI" or the "Company")
Net Asset Value as at 28 February 2019 and Investment Update
The NAV for SEQI, the specialist investor in economic
infrastructure debt, increased to 102.77p from the prior month's
NAV of 101.38p per share. The changes in NAV arose primarily
through:
-- Interest income net of expenses of 0.71p;
-- An increase of 0.67p in asset valuations; and
-- An increase of 0.10p from FX movements.
During the month, the Company made two additional drawings on
its Revolving Credit Facility of $50.0m and GBP20.0m respectively,
resulting in total outstanding debt of GBP112.8m. After deducting
cash, the Company had net leverage of GBP62.8m as at 28 February.
The Company also had undrawn commitments, and one additional
investment in settlement, collectively valued at GBP88.4m.
The Company's invested portfolio comprised of 48 private debt
investments and 20 infrastructure bonds across 8 sectors and 26
sub-sectors and had an annualised yield-to-maturity (or
yield-to-worst in the case of callable bonds) of 8.5% and a
weighted average life of approximately 5.4 years. Private debt
investments represented 86% of the total portfolio and 70% of the
portfolio comprised floating rate assets. The weighted average
purchase price of the Company's investments was 94% of par.
Investments which are pre-operational represented 18.8% of total
assets.
The Company's invested portfolio remains geographically diverse
with 47% located across North America, 19% in the UK, 26% in
Europe, and 9% 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 future economic
infrastructure debt investments remains strong and is diversified
by sector, sub-sector, and jurisdiction.
As at 28 February 2019, approximately 99% 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 February
include:
-- A $50.0m primary loan to Kaveh Ventures for the construction
of a 96MW data centre in Ashburn, Virginia;
-- A final GBP25.0m disbursement to Bulb Energy, an electricity supplier in the UK;
-- An initial GBP7.2m primary loan to Forsa Energy, a company
with a portfolio of gas-fired flexible generation assets in the
UK;
-- An additional PLN 2.3m disbursement to Project Warsaw's VAT facility;
-- An additional $6.7m disbursement to Whittle Schools in the US; and
-- An additional EUR0.5m disbursement to Hatch student housing in Cork, Ireland.
The following investment was prepaid during February, and was
in-line with expectations:
-- The $34.7m primary loan to Abteen Ventures.
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 53.6 TMT cable 10.8
Salt Creek Midstream USD Private Senior 52.0 Utility Midstream 8.5
Tracy Hills TL Residential
2025 USD Private Senior 45.2 Other infra 10.5
Scandlines Mezzanine
2032 EUR Private HoldCo 44.1 Transport Ferries 6.1
Bannister Senior
Secured GBP Private Senior 42.0 Accomm. Health care 8.0
Adani Abbot HoldCo
2021 AUD Private HoldCo 40.1 Transport Port 9.3
Kaveh Senior
Secured TL 2021 USD Private Senior 37.7 TMT Data centers 8.2
Electricity
Bizkaia TL 2021 EUR Private HoldCo 35.3 Power gen. 7.7
Bulb Senior TL Electricity
2021 GBP Private Senior 35.0 Utility supply 7.2
Aquaventure USD Private Senior 33.9 Utility Water 8.3
Solar &
Project Warsaw EUR Private Senior 30.8 Renewables wind 5.9
Seaport TL B USD Private Senior 30.0 Transport Port 8.2
Solar &
Sunrun Hera 2017-B USD Private Mezz 29.8 Renewables wind 8.2
Epic Midstream USD Private Senior 28.7 Utility Midstream 8.0
Sacramento Data
Centre USD Private Senior 27.8 TMT Data centers 10.0
Note (1) - excluding accrued interest
Market Summary
A total of 28 project finance transactions closed in February
throughout the Company's eligible jurisdictions, worth $6.3bn in
aggregate. Notable transactions during the month include:
-- A EUR260m financing of the construction of the 240 MW Yerevan power plant in Armenia;
-- A $742m financing of the 485MW Hannibal Port Power Plant in the United States;
-- A $435m refinancing of the Brooklyn Navy Yard Cogeneration plant in New York City; and
-- A CAD $412m PPP financing of the Tlicho All Season road in
the Northwest Territories, Canada.
US GDP growth was confirmed to slow to an annualized rate of
2.6% in Q4 2018, a slowdown, but not as much as some investors had
feared. This finalized growth for the year at 2.9%. US GDP is
estimated to grow 0.5% in Q1 2019, a decrease from Q1 2018. China's
economy continues to slow, with negative implications for US GDP
growth.
Eurozone growth is estimated for 0.2% in Q1 2019, the same as Q4
2018. US tariffs and concerns about Brexit continue to undermine
economic confidence, with the export-driven German economy
particularly concerned. After ending its financial stimulus
program, the ECB has decided to once again re-instate financial
stimulus and has pushed back the earliest date at which it would
increase interest rates.
Sterling has remained volatile throughout the month, weighed
down by fears of a no-deal Brexit. UK economic growth remains slow,
with a forecast of 1.4% GDP growth for 2019, although unemployment
remains at 4.0%, its lowest rate since the 1970's. There remains
considerable uncertainty driven by the lack of a clear plan for how
the UK will manage its 29 March deadline for leaving the EU.
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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