Net Asset Value(s)

RNS Number : 7238J

Sequoia Economic Infra Inc Fd Ld

14 September 2016

 

14 September 2016

Sequoia Economic Infrastructure Income Fund Limited

Net Asset Value as at 31 August 2016 and Investment Update

Ordinary Share update

As of the 31st August 2016, the Ordinary share class held 17 private debt investments and 11 infrastructure bonds, collectively valued at £292.7m including accrued interest, with an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 8.2% and a weighted average life across the acquired portfolio of approximately 5.1 years.

Approximately 50% of the Ordinary Share portfolio comprises floating rate assets, with only four LIBOR floors, as such the portfolio's yield is likely to increase 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 and aircraft and ship leasing.

The small decrease in the Ordinary Share NAV to 100.44p from 100.78p per share arose primarily through:  

·       Interest income net of expenses of 0.41p;

·       A decline of 0.70p in asset valuations;

·       A decline of 0.06p in FX movements.

Ordinary Portfolio Summary (10 largest settled investments)

Transaction name	Currency	Type	Ranking	Value £mm(1)	Sector	Sub-sector	Yield to maturity / worst (%)
A'lienor S.A.S. (A65)	EUR	Private	Senior	31.6	Transport	Road	5.25
Infinis Bridge	GBP	Private	HoldCo	24.0	Renewables	Solar & Wind	10.00
Exeltium Mezzanine	EUR	Private	Mezz	19.0	Power	PPA	9.15
Danaos Snr Secured 2018	USD	Private	Senior	17.7	Transport assets	Shipping	13.22
Neoen Production 1 S.A.S.U	EUR	Private	HoldCo	16.6	Renewables	Solar & Wind	6.99
IO Data Centers LLC	USD	Private	Senior	15.2	TMT	Data Centres	7.50
Biffa TL A	GBP	Private	Senior	13.0	Utility	Waste	6.51
GFL 9.875% 2021	USD	Public	Senior	12.4	Utility	Waste	6.67
Green Plains TL B	USD	Private	Senior	10.9	Other	Alternative Fuel	7.52
Reliance Rail Finance 2018	AUD	Private	Senior	10.5	Transport assets	Rolling Stock	6.84

Note (1) - excluding accrued interest

C Share update

At month end, the C Share class held 7 private debt investments and 2 infrastructure bonds, with one further private debt position in the process of settlement. These assets are collectively valued at £118.1m including accrued interest, with an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 9.0% and a weighted average life across the acquired portfolio of approximately 4.1 years.

The investments are geographically diverse and cover the power, aircraft leasing, renewable, utility and health care sectors.

Investments in August include:

·       Senior unsecured loan to Natgasoline, a methanol production facility in Texas;

·       A mezzanine loan to Regard Group, a specialist care home operator in the UK;

·       A term loan to an aircraft leasing company.

The Investment Adviser continues to see attractive opportunities for the deployment of capital in the economic infrastructure debt sector, and expects the overall yield on the C Share portfolio to remain 8% or higher.

The small decrease in the C Share NAV to 98.49p from 98.58p per share arose primarily through:

·       Interest income net of expenses of 0.37p;

·       A decline of 0.42p in FX movements; and

·       A decline of 0.06p in asset valuations.

C-Share Portfolio Summary (all settled investments)

Transaction name	Currency	Type	Ranking	Value £mm(1)	Sector	Sub-sector	Yield to maturity / worst (%)
AP Wireless Infrastructure	GBP	Private	Senior	27.0	TMT	Towers	6.63
Regard Group Mezzanine	GBP	Private	Mezz	22.5	Accommodation	Health Care	12.00
Natgasoline Senior Unsecured	USD	Private	Mezz	19.2	Other	Industrial Infrastructure	9.51
Longview Power TL B	USD	Private	Senior	13.0	Power	Electricity Generation	10.60
Talen Energy Supply 4.6% 2021	USD	Public	Senior	11.8	Power	Electricity Generation	9.88
IO Data Centers LLC	USD	Private	Senior	11.4	TMT	Data Centres	7.50
Peterborough Progress Health	GBP	Public	Senior	8.9	Other	PFI	5.88
Castlelake 2016-1 C	USD	Private	Mezz	3.0	Transport Assets	Aircraft	8.24
DBB Jack-up Services 2019	EUR	Private	Senior	0.5	Other	Renewable Equipment	9.38

Note (1) - excluding accrued interest

Market Summary

August was an active month for UK renewables projects during which five projects reached financial close. The largest project to close in August was Tees CHP Biomass Plant (299MW) which secured roughly £900m to construct and operate the plant in north-east England.

In August, the Bank of England cut interest rates for the first time since 2009, from 0.50% to 0.25%, in response to Brexit uncertainty. 

Sterling remained relatively flat against the US Dollar at $1.32, and fell slightly against the Euro, ending the month at €1.18.

During August, the Bloomberg USD High Yield Corporate Bond Index rose from 163 to 166.

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 [phone]

Stifel Nicolaus Europe Limited

Neil Winward / Mark Bloomfield / Gaudi Le Roux              Telephone [phone]

International Fund Management Limited

Chris Hickling                                                                Telephone [phone]

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).

 

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