TIDMSEQI
RNS Number : 9920H
Sequoia Economic Infra Inc Fd Ld
14 June 2017
14 June 2017
Sequoia Economic Infrastructure Income Fund Limited
Net Asset Value as at 31 May 2017 and Investment Update
Ordinary Share update
The Board is pleased that the Ordinary Share Issue announced on
3 May was significantly oversubscribed and investor demand for the
Issue exceeded the maximum issue size of GBP160 million.
The Board determined to issue 151,658,768 new Ordinary Shares at
the Issue Price of 105.5 pence. Accordingly, the gross proceeds of
the Issue were approximately GBP160 million. The Investment Adviser
continues to see significant opportunities in the infrastructure
debt market.
The increase in SEQI's NAV to 101.22p per share from 101.07p per
share on 28th April 2017 arose primarily through:
-- Interest income net of expenses of 0.46p;
-- A decrease of 0.85p in asset valuations;
-- No effect from FX movements;
-- A gain of approximately 0.55p from the Ordinary Share Issue.
During May, the Company had invested or committed to invest a
total of GBP27.4 million which resulted in the total invested
portfolio representing approximately 76.7% of the Company's NAV
(including cash from the issue of new shares) as of the 31st May
2017. As of the 31st May 2017, the Company had gross leverage of
GBP40 million which has been drawn and partially deployed, and
represents approximately 5.3% of NAV.
The portfolio held 29 private debt investments and 15
infrastructure bonds for a total of 44 investments that covered 8
sectors and 24 subsectors, and are collectively valued at GBP570.0
million including accrued interest with an annualised
yield-to-maturity (or yield-to-worst in the case of callable bonds)
of 8.5% and a weighted average life across the acquired portfolio
of approximately 4.5 years.
The weighted average purchase price of the Company's acquired
investments was approximately 96.4% of par, and of those, only 13%
had some form of construction risk.
During May, Sterling fell slightly against the Euro and the
Dollar, ending the month at EUR1.147 and $1.287 respectively, and
the Bloomberg USD High Yield Corporate Bond Index rose to 178.8. As
of the 31st May 2017, approximately 89% of NAV consisted of either
Sterling assets or was hedged into Sterling.
The Company has 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.
Approximately 50% of the invested portfolio comprises floating
rate assets, with only two LIBOR floor above current LIBOR levels
(EUR). As such, the portfolio's yield is likely to rise over time
as LIBOR increases.
The Company's investment activities during May include (traded
but unsettled):
-- Primary participation of GBP10 million in the new issue of
Heathrow Finance PLC 3.875% 2027 bond issue;
-- Primary participation of $7.5 million in the C notes of the
new Apollo Aviation 2017-1 aircraft securitization deal; and
-- Sale of the underperforming Danaos Senior Secured 2018 loan
in order to reduce portfolio risk.
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 37.6 Transport Road 3.4
AP Wireless
Infrastructure GBP Private Senior 33.0 TMT Towers 6.2
Waste
Cory Environmental GBP Private HoldCo 32.7 Utilities to Energy 8.5
Beamish HoldCo Health
2017 GBP Private Senior 30.0 Accommodation Care 10.3
IO Data Centers Data
LLC USD Private Senior 29.1 TMT Centers 9.0
Abteen Ventures Data
LLC USD Private Senior 27.2 TMT Centers 8.0
Regard Group Health
Mezzanine GBP Private Mezz 23.3 Accommodation Care 12.1
Natgasoline Industrial
Senior Unsecured USD Private Mezz 20.4 Other Infrastructure 10.0
Exeltium
Mezzanine EUR Private Mezz 19.2 Power PPA 9.4
Welcome Break Motorway
No.1 Ltd GBP Private Mezz 18.3 Transport Services 8.3
NGG Finance Electricity
5.625% 2073 GBP Public Mezz 16.9 Utilities Distribution 3.8
Solar
Neoen Production EUR Private HoldCo 16.5 Renewables & Wind 7.0
Cheniere
Corp Christi
7% 2024 USD Public Senior 13.0 Transport Ports 4.8
NRG Energy
Inc 7.25% Electricity
2026 USD Public Senior 12.7 Power Generation 6.8
GFL 9.875%
2021 USD Public Senior 12.7 Utility Waste 3.4
Note (1) - excluding accrued interest
Market Summary
A total of 24 project finance transactions closed in May
throughout the Company's eligible jurisdictions, and worth, in
aggregate, $12.5 billion. Notable transactions include the 200MW
Borkum West II German Offshore Wind project which received EUR800
million of financing of which EUR591 million was debt, and the
600MW Carlsbad Gas-Fired Energy Centre, which is located in San
Diego, California, and will replace an existing centre and is
fully-contracted with a 20-year PPA with San Diego Gas &
Electric.
Eurozone growth was strong in May, however inflation remains
subdued and is believed to still require stimulus, according to
Mario Draghi. While still dovish, ECB policymakers have noted that
risks to the Eurozone's economic outlook are no longer
predominantly negative.
The Federal Reserve signalled that a further increase in
short-term rates is possible in June, and that reducing the size of
its balance sheet will soon be a priority.
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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