TIDMSEQI
RNS Number : 1706U
Sequoia Economic Infra Inc Fd Ld
16 January 2017
16 January 2017
Sequoia Economic Infrastructure Income Fund Limited
Net Asset Value as at 30 December 2016 and Investment Update
Ordinary Share update
As of the 30th December 2016, the Company held 26 private debt
investments and 14 infrastructure bonds for a total of 40
investments across 8 sectors and 21 subsectors, which are
collectively valued at GBP475.0m including accrued interest, with
an annualised yield-to-maturity (or yield-to-worst in the case of
callable bonds) of 8.0% and a weighted average life across the
acquired portfolio of approximately 4.7 years. The Ordinary Share
NAV is 102.48p.
Approximately 44% of the portfolio comprises floating rate
assets, with only two LIBOR floors above current LIBOR levels (of
which one is Sterling and the other is Euros). 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 and aircraft and
ship leasing.
In the beginning of December, the Company remained fully
invested until the 9th December 2016 when the additional 120m
Ordinary Shares were issued, raising gross proceeds of GBP126m.
In the second half of December, the Company's investment
activities include:
-- An investment in Talen Energy Supply's bonds maturing in 2025;
-- VanGansewinkel Groep, a Dutch waste management company loan; and
-- The final drawdowns of Abteen Ventures LLC which now
represents the portfolio's third largest position valued at
28.4m.
In addition, two of the Company's investments prepaid in the
second half of December: Mount Signal Solar and Infinis Bridge
Loan. Both of these prepayments were in line with the Investment
Adviser's expectations.
As of the 30th of December, the Company's leverage is modest at
6.6% of NAV, and the Company remains confident in its ability to
deploy the proceeds of the equity raise into its attractive
pipeline of opportunities.
Sterling fell slightly against both the Dollar and the Euro
during the month of December; however the Investment Adviser
remains committed to reducing NAV volatility arising from FX
movements by maintaining its hedging strategy. As of the 30th
December 2016, approximately 78% of NAV was either Sterling assets
or hedged into Sterling, which is a slight decrease from 82% one
month prior.
The Company has more than adequate resources to cover the cash
costs associated with its hedging book. 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 increase in the Ordinary Share NAV to 102.48p per share
arose primarily through:
-- Interest income net of expenses of 0.37p;
-- An increase of 0.22p in asset valuations;
-- An increase of 0.06p in FX movements; and
-- A gain of approximately 0.4p caused by the difference between
placing price (net of costs and expenses) and the NAV at the time
of the recent placing of new Ordinary Shares in the Company.
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 37.3 Transport Road 3.39
IO Data Centers Data
LLC USD Private Senior 30.4 TMT Centers 9.00
AP Wireless
Infrastructure GBP Private Senior 30.0 TMT Towers 6.39
Data
Abteen Ventures USD Private Senior 28.4 TMT Centers 8.00
Regard Group Health
Mezzanine GBP Private Mezz 22.9 Accommodation Care 12.12
Natgasoline Industrial
Senior Unsecured USD Private Mezz 20.3 Other Infrastructure 9.78
Exeltium
Mezzanine EUR Private Mezz 19.0 Power PPA 9.14
Danaos Snr Transport
Secured 2018 USD Private Senior 17.8 assets Shipping 16.78
Solar
Neoen Production EUR Private HoldCo 16.1 Renewables & Wind 6.99
Longview
Power TL Electricity
B USD Private Senior 13.8 Power Generation 10.59
GFL 9.875%
2021 USD Public Senior 13.4 Utility Waste 4.79
VanGansewinkel
Groep EUR Private Senior 12.8 Utility Waste 8.58
Talen Energy
Supply 4.6% Electricity
2021 USD Public Senior 12.5 Power Generation 10.31
Green Plains Alternative
TL B USD Private Senior 11.5 Other Fuel 6.62
Heathrow
5.75% 2025 GBP Public Senior 11.4 Transport Airport 2.47
Note (1) - excluding accrued interest
Market Summary
December was an active month in the infrastructure debt sector
in terms of both the size and number of deals that reached
financial close.
According to Infrastructure Journal, 25 transactions reached
financial close throughout Europe and North America in December
totalling nearly $6bn in debt financing.
One notable deal was 100% debt financing of the 1.5GW Lackawanna
CCGT Power Plant in Pennsylvania which totalled roughly $1bn. A
370MW offshore wind farm in Belgium also received financing of
EUR1.2bn, of which 70% is debt.
In December, oil prices surged to their highest levels since
July 2015 at roughly $57 a barrel, directly resulting from a
Russian-led oil producer coalition.
December news flow also covered the US Federal Reserve's
decision to raise short-term interest rates in response to the
strengthening US economy.
In Europe, Mario Draghi at the ECB confirmed that the QE program
will be extended by nine months which was followed by clear upward
movements in sovereign bond yields.
During December, Sterling fell slightly against both the Dollar
and Euro, ending the month at $1.23 and EUR1.17 respectively. The
Bloomberg USD High Yield Corporate Bond Index rose to 169.
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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