SEQI Sequoia Economic Infrastructure Income Fund Limited

TIDMSEQI

RNS Number : 6307L

Sequoia Economic Infra Inc Fd Ld

14 September 2021

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES

14 September 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 102.09 pence per share from the prior

month's NAV of 101.86 pence per share, representing an increase of 0.23 pence per share. A full attribution of the changes in the NAV per share is as follows:

 
                                   pence per 
                                     share 
---------------------------------  --------- 
July NAV                            101.86 
Interest income, net of expenses     0.58 
FX movements, net of hedges          -0.34 
Increase in asset valuations         -0.01 
August NAV                          102.09 
=================================  ========= 
 

Portfolio update

As at 31 August 2021, the Company had cash of GBP145.5m and had drawn GBP83.9m on its GBP280m revolving credit facility. The Company also had undrawn commitments on existing investments collectively valued at GBP117.9m. The Company's invested portfolio comprised of 63 private debt investments and 12 infrastructure bonds across 8 sectors and 30 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 5.9%. The weighted average portfolio life is approximately 4.4 years. Private debt investments represented 94% of the total portfolio and 50% of the portfolio comprised floating rate assets. The weighted average purchase price of the Company's investments was 99.0% of par. Investments which are pre-operational represented 15.2% of total assets. The Company's invested portfolio remains geographically diverse with 46% located across the US, 21% in the UK, 28% in Europe, and 5% 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 100% 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 Investment Adviser, the Investment Manager, and PWC, the independent valuation agent continue to observe the previously identified uplift in valuations of the assets where COVID-19 has impacted performance to materialise. This trend is expected to persist as economies continue to recover and countries further open up on the back of their vaccination programmes. Talen performance continues to be poor as the company works through its plans to address its high debt load in light of its adverse performance, driven, as we understand it, primarily by an out-of -- the money hedging programme which has led to cash and non-cash losses which we further understand to be one-off adjustments with underlying operating performance net of these items remaining average. The Investment Adviser continues to proactively monitor this holding.

On 5 July 2021, the Company published its Annual Report for the year ended 31 March 2021 which is available on its website (see results presentation ). The Board was pleased to announce a total NAV return of 13.5% in the year and an improvement to the portfolio's ESG profile year on year.

The Company's settled investment activities during August include:

-- Another $5.0m bond purchase of Inmarsat, the largest UK satellite communications company;

-- An additional $1.2m disbursement to Lanthanum, a leading developer of hyperscale data centres in Virginia;

-- An additional GBP6.5m loan to Trident Bidco, an acquisition financing facility for specialist healthcare in the UK;

-- An additional GBP1.0m loan to Lloyds Development Limited, a hotel development in Glasgow; and

-- An $35.0m loan to Brightline, a privately owned passenger rail project in Florida.

The following assets sold or prepaid in August:

-- A $30.0m primary loan to Prometheus Energy, a leading independent fuel distributor and convenience store retailer in the US;

-- A $30.0m Primary loan to CSG Holdings backed by 7 interconnecting natural gas pipelines throughout the US; and

-- A $30.0m Opco loan to Cardinal States Gathering Company LLC backed by 7natural gas pipelines throughout the US.

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    66.8       assets          stock            5.4           5.40 
                                                                                Landfill 
 Infinis Energy         GBP      Private      Senior    65.0   Renewables            gas            5.0           5.00 
 AP Wireless                                                                     Telecom 
  Junior                EUR      Private        Mezz    60.9          TMT         towers            6.1           6.13 
 Bannister Senior                                                                 Health 
  Secured               GBP      Private      Senior    55.5      Accomm.           care            6.6           6.57 
 Hawkeye Solar 
  HoldCo 2030 1,                                                                   Solar 
  2, and 3              USD      Private      HoldCo    54.9   Renewables         & wind            7.8           7.84 
 Hawaiki Mezzanine                                                              Undersea 
  Loan                  USD      Private        Mezz    54.7          TMT          cable            9.5           9.51 
 Bulb Senior TL                                                              Electricity 
  2021                  GBP      Private      Senior    54.7      Utility         supply            7.0           7.05 
 Tracy Hills TL                                                              Residential 
  2025                  USD      Private      Senior    53.6        Other          infra            8.1           8.08 
 AP Wireless US                                                                  Telecom 
  Holdco                USD      Private      HoldCo    50.3          TMT         towers            6.0           6.00 
 Expedient Data 
  Centers Senior 
  Secured 2026          USD      Private      Senior    46.7          TMT   Data centers            5.8           5.75 
 Scandlines 
  Mezzanine 
  2032                  EUR      Private      HoldCo    44.4    Transport        Ferries            9.6           9.56 
 Sacramento Data 
  Centre Senior 
  Secured 2028          USD      Private      Senior    44.4          TMT   Data centers            6.9           6.94 
 Care4U Senior                                                                    Health 
  Secured 2026          EUR      Private      Senior    43.5      Accomm.           care            6.0           6.00 
 Euroports 2nd 
  Lien 2026             EUR      Private        Mezz    43.4    Transport           Port            8.0           7.99 
                                                                                  Health 
 Project Rose           GBP      Private      Senior    40.0      Accomm.           care            6.8           6.84 
 

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

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

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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September 14, 2021 02:00 ET (06:00 GMT)