TIDMSEQI
RNS Number : 7784L
Sequoia Economic Infra Inc Fd Ld
15 January 2021
15 January 2021
Sequoia Economic Infrastructure Income Fund Limited
("SEQI" or the "Company")
NAV update
The NAV for SEQI, the specialist investor in economic
infrastructure debt, increased to 101.65 pence per share from the
prior month's NAV of 100.27 pence per share, representing an
increase of 1.38 pence per share.
The gain in asset valuations this month can be attributed
primarily to the increase in valuation of several sizeable Company
positions that have seen material credit improvements and
outperformed expectations.
A full attribution of the changes in the NAV per share is as
follows:
pence per
share
--------------------------------- ---------
November NAV 100.27
Interest income, net of expenses 0.74
FX movements, net of hedges -0.14
Increase in asset valuations 0.78
December NAV 101.65
================================= =========
Update on the effects of COVID-19 on the Portfolio
The Investment Adviser, the Investment Manager, and PWC, the
independent valuation agent, have continued their close analysis of
the effects of COVID-19 on the Company's portfolio which includes a
market benchmarking exercise to conclude on spread and yield
adjustments for each of the investments. The Investment Adviser is
also closely monitoring the Company's assets that have not been
performing as expected.
Broadly speaking, the spread widening across the portfolio
during the second half of March 2020 continued its reversal
throughout December, with several of the Company's investments
performing better than expectations despite the various
governmental COVID-19 induced restrictions in various countries.
Spread tightening driven by credit improvements was evident across
various sectors in the portfolio which resulted in uplifts to
valuations of the relevant assets.
Further Portfolio update
As at 31 December 2020, the Company had cash of GBP102.6m and
had drawn GBP149.0m on its GBP280m Revolving Credit Facility. The
Company also had undrawn commitments on existing investments
collectively valued at GBP158.3m. The Company's invested portfolio
comprised of 63 private debt investments and 11 infrastructure
bonds across 8 sectors and 27 sub-sectors. It had an annualised
yield-to-maturity (or yield-to-worst in the case of callable bonds)
of 9.3% and a cash yield of 5.7%. Based on the Investment Adviser's
analysis of our current portfolio we continue to believe that our
annual dividend remains fully cash covered, net of all expenses.
The weighted average portfolio life is approximately 4.1 years.
Private debt investments represented 95% of the total portfolio and
63% of the portfolio comprised floating rate assets. The weighted
average purchase price of the Company's investments was 97.3% of
par. Investments which are pre-operational represented 8.4% of
total assets.
The Company's invested portfolio remains geographically diverse
with 48% located across the US, 15% in the UK, 31% in Europe, and
6% 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 98.0% of the Company's NAV consisted
of either Sterling assets or was hedged into Sterling. The Company
has adequate resources to cover margin calls on its hedging
book.
The Company's settled investment activities during December
include:
-- A EUR76.1m primary loan in Madrid Metro, financing 4 SPVs
that lease rolling stock to the Madrid Metro;
-- An EUR18.0m primary investment in Ziton Wind Entreprise's
bonds, an offshore wind turbine maintenance company located in
Denmark;
-- An additional $25m investment in Tracy Hills, a residential
infrastructure project in California;
-- An additional $0.4m disbursement to Bourzou Equity, a company
created for a data center in Virginia.
The Company's investments that were sold or prepaid in December
include:
-- A $45m sale of General Electric's 5% perpetual bonds, a
diversified industrial conglomerate.
Ordinary Portfolio Summary (15 largest settled investments)
Investment name Currency Type Ranking Value Sector Sub-sector Cash-on-cash Yield
GBPm yield to maturity
(1) (%) / worst
(%)
Transport Rolling
Madrid Metro EUR Private HoldCo 68.2 assets stock 1.30 5.40
AP Wireless Telecom
Junior EUR Private Mezz 62.1 TMT towers 4.25 6.25
Tracy Hills TL Residential
2025 USD Private Senior 56.1 Other infra. 8.15 8.15
Hawaiki Mezzanine Undersea
Loan USD Private Mezz 55.0 TMT cable 8.55 9.56
Warnow Tunnel
Tranches EUR Private Senior 52.5 Transport Road 1.37 2.26
Expedient Data
Centers USD Private Senior 47.0 TMT Data centers 5.68 5.85
Care4U Senior Health
Secured EUR Private Senior 45.3 Accom. care 6.50 6.50
Euroports 2nd
Lien 2026 EUR Private Mezz 45.3 Transport Port 7.81 7.92
Scandlines
Mezzanine
2032 EUR Private HoldCo 44.2 Transport Ferries 0.00 9.13
Bannister Senior Health
Secured GBP Private Senior 42.1 Accom. care 6.58 6.78
Adani Abbot
HoldCo AUD Private HoldCo 42.1 Transport Port 5.76 15.33
Hawkeye Solar Solar
HoldCo USD Private HoldCo 39.9 Renewables & wind 8.25 8.25
Ziton Senior Transport Specialist
Secured 2022 EUR Private Senior 38.9 assets shipping 8.86 14.95
Jetpeaks HoldCo Electricity
2027 USD Private HoldCo 38.6 Power generation 7.49 8.02
Terra-Gen Power Solar
TL B USD Private Senior 38.6 Renewables & wind 5.31 6.55
Note (1) - excluding accrued interest
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
Anurag Gupta
Jefferies International Limited +44 (0)20 7029 8000
Gaudi le Roux
Neil Winward
Tulchan Communications (Financial PR) +44 (0)20 7353 4200
Martin Pengelley
Elizabeth Snow
Laura Marshall
Praxis Fund Services Limited (Company Secretary) +44 (0) 1481 755530
Matt Falla
Katrina Rowe
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.
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END
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