TIDMSEQI
RNS Number : 7712W
Sequoia Economic Infra Inc Fd Ld
14 February 2017
14 February 2017
Sequoia Economic Infrastructure Income Fund Limited
Net Asset Value as at 31 January 2017 and Investment Update
Ordinary Share update
During January, the Company had invested or committed to invest
a total of GBP83.6m which resulted in the total invested portfolio
representing approximately 91% of the Company's NAV as of the
31(st) January 2017.
The portfolio held 29 private debt investments and 14
infrastructure bonds for a total of 43 investments that covered 8
sectors and 23 subsectors, and are collectively valued at GBP560.8m
including accrued interest with an annualised yield-to-maturity (or
yield-to-worst in the case of callable bonds) of 8.1% and a
weighted average life across the acquired portfolio of
approximately 4.6 years.
As of the 31(st) January 2017, the Company had gross leverage of
GBP40m which represents approximately 6.6% of NAV. The Company
remains confident in its ability to deploy the proceeds of the
equity raise into its attractive pipeline of opportunities.
Approximately 42% of the portfolio comprises floating rate
assets, with only three LIBOR floors above current LIBOR levels (of
which one is 1 month USD and the others are EUR). As such, the
portfolio's yield is likely to rise over time as LIBOR
increases.
The investments are across the UK, Western Europe, Australia,
Canada and the US and include a wide range of asset types including
road, rail, utility, power, shipping, renewables, aircraft and ship
leasing.
In the second half of January, investments made by the Company
include:
-- A primary participation of GBP30m in a senior secured bridge
loan issued by HC-One, a leading UK care homes owner and
operator;
-- A primary participation of GBP18.3m in a junior term loan
issued by Welcome Break, a UK motorway services provider;
-- A secondary acquisition of EUR12m in a senior loan held by
Latécoère SA, an aircraft component company; and
-- Incremental investments in the following assets: Green Plains
TL B, Castlelake 2016-1 C loan, Alinta Energy TL B, Bristow 6.25%
2022 bonds, and NRG Energy 7.25% 2026 bonds.
Sterling rose against the Dollar and fell slightly against the
Euro during the month of January; however, the Investment Adviser
remains committed to reducing NAV volatility arising from FX
movements by maintaining its hedging strategy. As of the 31(st)
January 2017, approximately 76% of NAV consisted of either Sterling
assets or was hedged into Sterling.
The Company has more than adequate resources to cover the cash
costs associated with its hedging activities. Each of its FX hedge
providers has credit lines to the Company which means that the
margin calls on the hedge portfolio have been modest.
The decrease in the Ordinary Share NAV to 102.37p per share from
102.48p in December 2016 arose primarily through:
-- An increase of 1.38p in asset valuations;
-- Interest income net of expenses of 0.21p;
-- A decrease of 0.21p from FX movements; and
-- A dividend declaration of 1.50p.
On the 18(th) January 2017, the Company declared a dividend of
1.5 pence with respect to the three month period ending the 31(st)
December 2016. The shares traded ex-dividend from the 26(th)
January, with payment on the 24(th) February.
Ordinary Portfolio Summary (15 largest settled investments)
Transaction Currency Type Ranking Value Sector Sub-sector Yield
name GBPm(1) to
maturity
/ worst
(%)
A'lienor
S.A.S. (A65) EUR Private Senior 37.5 Transport Road 3.47
AP Wireless
Infrastructure GBP Private Senior 30.0 TMT Towers 6.32
IO Data Centers Data
LLC USD Private Senior 29.8 TMT Centers 9.00
Beamish HoldCo Health
2017 GBP Private Senior 29.6 Accommodation Care 12.37
Data
Abteen Ventures USD Private Senior 27.8 TMT Centers 8.00
Regard Group Health
Mezzanine GBP Private Mezz 22.9 Accommodation Care 12.12
Natgasoline Industrial
Senior Unsecured USD Private Mezz 19.9 Other Infrastructure 10.00
Exeltium
Mezzanine EUR Private Mezz 18.9 Power PPA 9.40
Welcome Break Motorway
No.1 Ltd GBP Private Mezz 18.3 Transport Services 8.36
Danaos Snr Transport
Secured 2018 USD Private Senior 17.6 Assets Shipping 18.37
Bristow Group Transport
6.25% 2022 USD Public Mezz 17.3 Assets Aircraft 8.39
Solar
Neoen Production EUR Private HoldCo 16.2 Renewables & Wind 6.99
Green Plains Alternative
TL B USD Private Senior 14.1 Other Fuel 6.54
Longview Elec
TL B USD Private Senior 13.7 Power Generation 10.27
Alinta Energy Elec
TL B USD Private Senior 13.4 Utility Supply 6.58
Note (1) - excluding accrued interest
Market Summary
January was a slow month for the infrastructure finance sector,
with only five deals reaching financial close throughout North
America and Western Europe.
The largest deal which closed in January was the Cricket Valley
Energy Centre in Dover, New York. The financing was for the
development of the 1.1GW combined-cycle natural gas-fired plant,
and consisted of $700m equity and a syndicated loan of $875m.
USD 3m Libor rose above 1.0% in January for the first time since
2009 with the expectation that this will continue to rise in 2017
based on minutes of the December Federal Reserve meeting. In
contrast, the ECB remained dovish relative to the Fed by
maintaining rates and their QE strategy for 2017 despite meaningful
eurozone inflation, particularly in Germany.
During January, Sterling rose against the Dollar and fell
slightly against the Euro, ending the month at $1.26 and EUR1.16
respectively. The Bloomberg USD High Yield Corporate Bond Index
rose to 172.5.
The Company's monthly investor report and additional portfolio
disclosure will be made available at http://www.seqifund.com/.
Sequoia Investment Management Company
Randall Sandstrom / Steve Cook Telephone 020 7079 0483 / 020 7079 0481
Stifel Nicolaus Europe Limited
Neil Winward / Mark Bloomfield / Gaudi Le Roux Telephone 020 7710 7600
International Fund Management Limited
Chris Hickling Telephone 01481 737600
About Sequoia Economic Infrastructure Income Fund Limited
The Company is a Guernsey registered closed-ended investment
company that 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. The Company has been advised that the
Shares can be considered as "excluded securities" for the purposes
of the FCA rules regarding the definition and promotion of
Non-Mainstream Pooled Investments (NMPIs).
This information is provided by RNS
The company news service from the London Stock Exchange
END
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