TIDMSEQI
RNS Number : 5043W
Sequoia Economic Infra Inc Fd Ld
18 April 2023
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART
IN OR INTO THE UNITED STATES
18(th) April 2023
Sequoia Economic Infrastructure Income Fund Limited
("SEQI" or the "Company")
NAV update
The NAV per share for SEQI, the specialist investor in economic
infrastructure debt, increased to 93.26 per share from the prior
month's NAV per share of 93.10 pence per share, representing an
increase of 0.16 pence per share. A full attribution of the changes
in the NAV per share is as follows:
pence
per share
--------------------------------- -----------
February NAV 93.10
--------------------------------- -----------
Interest income, net of expenses 0.74
Asset valuations, FX movements
net of hedges -0.64
Subscriptions/Redemptions 0.06
March NAV 93.26
================================= ===========
As the Company is approximately 100% currency hedged, it does
not expect to realise any material FX gains or losses over the life
of its investments. However, the Company's NAV may include
unrealised short-term FX gains or losses, driven by differences in
the valuation methodologies of its FX hedges and the underlying
investments - such movements will typically reverse over time.
Capital Markets Day - 10 May 2023
The Investment Adviser will be holding a Capital Markets Day for
institutional investors and analysts on Wednesday 10th May 2023 at
15:00 BST until 17:00 BST. The aim of the event is to provide
investors with an insight to international infrastructure and
credit investment themes and an update on the positioning of SEQI
against the current market backdrop. There will also be an
opportunity for investors to meet members of the SEQI Board and the
broader Investment Adviser team.
Those interested in joining SEQI's Capital Markets Day
virtually, please register via the following link: (
https://www.lsegissuerservices.com/spark/SequoiaEconomicInfrastructureIncomeFundLtd/events/4b6c6d4e-46a9-4db2-8be9-a445965021dc
). Those interested in attending in-person should email:
Sequoia@teneo.com
Dividends and share buyback
The next expected dividend declaration date will be on 20 April
2023. This will be the second quarterly dividend at the new, higher
dividend target, which was increased by 10% in November 2022 to
6.875 pence p.a. At the closing share price of 82.90 on 17 April
2023, the dividend yield on the Company's share price is 8.29%.
During March 2023 the Company purchased 9,440,784 of its
ordinary shares in the market at an average purchase price of 81.64
pence per share. Following this, the Company holds 33,419,445
ordinary shares in Treasury following the commencement of a share
buyback programme in July 2022. The Board and the Investment
Adviser remain confident in the Company's NAV, including uplifts
over time expected from the pull-to-par effect (see below).
Portfolio update
As at 31 March 2023, the Company had cash of GBP68.1m and had
drawn GBP181.8m on its GBP325.0m revolving credit facility with the
remaining balance available to support the Company's working
capital and liquidity requirements. The Company also had undrawn
commitments on existing investments collectively valued at
GBP49.5m.
The Company's invested portfolio consisted of 61 private debt
investments and 7 infrastructure bonds across 8 sectors and 26
sub-sectors. It had an annualised yield-to-maturity (or
yield-to-worst in the case of callable bonds) of 11.85% and a cash
yield of 7.5%. The yield-to-maturity has been rising, which is
mainly attributable to the higher interest rate environment and the
Company's exposure to floating rate investments, which comprise 58%
of the portfolio as of March 2023. The weighted average portfolio
life is approximately 3.5 years. Private debt investments
represented 98% of the total portfolio. The Company's invested
portfolio remains geographically diverse with 50.1% located across
the US, 25.6% in the UK, 24.2% in Europe, and 0.1% in Australia/New
Zealand.
Recent reductions in asset values continue to be primarily due
to increases in risk-free rates and credit spreads. Investors are
reminded that these declines are unrealised mark-to-market
adjustments that should reverse over time as the investments
approach their repayment date (the "pull-to-par" effect). As at
March 2023, the pull-to-par is estimated to be worth approximately
6.8p/share over the course of the life of the Company's
investments.
The Company's pipeline of economic infrastructure debt
investments remains strong and is diversified by sector,
sub-sector, and jurisdiction. At month end, approximately 100% of
the Company's NAV consisted of either Sterling assets or was hedged
into Sterling. The Company has adequate liquidity to cover margin
calls on its hedging book.
The following investments settled in March 2023 (excluding small
loan drawings of less than GBP0.5m):
-- The purchase of Samhällsbyggnadsbolaget (SBB) i Norden AB
2026 and SBB i Norden AB 2027 senior corporate bonds for EUR6.0m
and EUR8.3m respectively. SBB is a social infrastructure property
company listed on the Nasdaq Stockholm (Large Cap) and their
yield-to-maturity is approximately 10.8%;
-- The Company has exchanged approximately GBP11.3m of Bulb
Energy's loan for a majority shareholding in Zoa (see further
details below)
-- An additional senior loan for GBP5.08m to Project Octopus, a
telecom infrastructure services provider based in the UK; and
-- An additional senior loan for GBP1.7m to Clyde Street, a
hotel construction project in Scotland .
No investments sold or prepaid in March 2023
Non-performing loans
There has been ongoing progress over the past month in relation
to the Company's non-performing loans.
The amount owed under the Company's loan to Bulb Energy has been
reduced by GBP11.3 million during the month, following the partial
debt-for-equity swap in relation to Zoa, which, as announced
previously, is a new pioneering business that owns all the software
developed by Bulb and has about 100 employees focused on further
developing the software, which will be marketed for sale to energy
supply companies in the UK and elsewhere. The Company now owns
preference shares in Zoa (in an amount of GBP11.3 million) and the
majority of the ordinary shares in the business, with the balance
being owned by management and employees of Zoa.
Further updates will be provided to shareholders in the future
when developments occur.
Ordinary Portfolio Summary (15 largest settled investments)
Investment name Currency Type Ranking Value Sector Sub-sector Cash-on-cash Yield
GBPm(1) yield to
(%) maturity
/ worst
(%)
Bannister Senior
Secured 2025 GBP Private Senior 61.0 Accommodation Health care 11.69 12.99
AP Wireless
Junior EUR Private Mezz 58.7 TMT Telecom towers 4.62 8.04
AP Wireless US
Holdco USD Private HoldCo 58.6 TMT Telecom towers 6.21 9.37
Montreux HoldCo
Facility GBP Private HoldCo 57.4 Accommodation Health care 14.20 14.20
Lightspeed Fibre
Group Ltd GBP Private Senior 56.4 TMT Broadband 6.64 14.54
Landfill
Infinis Energy GBP Private Senior 56.2 Renewables gas 5.79 7.10
Transport Specialist
Project Tyre USD Private Senior 56.0 assets shipping 10.43 10.43
Tracy Hills TL Residential
2025 USD Private Senior 55.6 Other infra 11.12 11.12
Hawkeye Solar
HoldCo
2030 USD Private HoldCo 54.1 Renewables Solar & wind 8.96 9.82
Expedient Data
Centers Senior USD Private Senior 51.5 TMT Data centers 10.54 11.01
Workdry GBP Private Senior 50.0 Utility Utility Services 7.72 7.72
Project Spinnaker GBP Private Senior 49.3 TMT Broadband 9.69 10.01
GenOn Bowline
Senior
Secured USD Private Senior 49.3 Power Energy transition 11.83 11.82
EIF Van Hook TL
B 2024 USD Private Senior 48.0 Utility Midstream 10.09 10.02
Transport
Madrid Metro EUR Private HoldCo 46.8 assets Rolling stock 1.39 7.19
Note (1) - excluding accrued interest
Disclaimer: the dividend increase is a target and not a profit
forecast
The Company's monthly investor report and additional portfolio
disclosure will be made available at http://www.seqifund.com/ .
LEI: 2138006OW12FQHJ6PX91
This announcement is not for publication or distribution,
directly or indirectly, in or into the United States of America.
This announcement is not an offer of securities for sale into the
United States. The securities referred to herein have not been and
will not be registered under the U.S. Securities Act of 1933, as
amended, and may not be offered or sold in the United States,
except pursuant to an applicable exemption from registration. No
public offering of securities is being made in the United
States.
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
Stuart Klein
Teneo (Financial PR) +44 (0)20 7353 4200
Martin Pengelley
Elizabeth Snow
Sanne Fund Services Guernsey Limited +44 (0) 20 3530 3107
(Company Secretary)
Matt Falla
Lisa Garnham
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
NAVBCGDSXSBDGXR
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April 18, 2023 02:00 ET (06:00 GMT)
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