TIDMSEQI
RNS Number : 1858F
Sequoia Economic Infra Inc Fd Ld
13 November 2020
13 November 2020
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 98.96 pence per share from the
prior month's NAV of 98.61 pence per share (being the 30 September
2020 cum-income NAV of 100.17 pence less the dividend of 1.5625
pence per share declared in respect of the quarter ended 30
September 2020), representing an increase of 0.35 pence per
share.
A full attribution of the changes in the NAV per share is as
follows:
pence per
share
------------------------------------- ---------
September NAV 100.17
Dividend declared for quarter ending
30 September 2020 -1.56
Adjusted opening NAV 98.61
Interest income, net of expenses 0.45
FX movements, net of hedges 0.25
Decrease in asset valuations -0.35
October NAV 98.96
===================================== =========
Update on the effects of COVID-19 on the Portfolio
The Investment Adviser, the Investment Manager, and PWC, the
independent valuation agent, have continued their close analysis of
the effects of COVID-19 on the Company's portfolio which also
includes a market benchmarking exercise to conclude on spread and
yield adjustments for each of the investments. The Investment
Adviser is also closely monitoring the Company's assets that have
not been performing as expected. The decline in asset valuations
can be attributed primarily to PWC adjusting the marks of certain
private loans where Borrowers continue to face challenges
associated with the COVID-19 crisis, including for example where
reduced demand or sales have impacted the Borrowers' short term
liquidity positions. This reduction has been partially offset by
gains on assets in the telecommunications sector that have been
performing better than expected throughout this period and have
seen valuations improve significantly.
Broadly speaking, the spread widening across the portfolio
during the second half of March 2020 continued its reversal until
August and remained stable since then, with several of the
Company's investments performing better than expectations after the
initial lockdown.
Further Portfolio update
As at 30 October 2020, the Company had cash of GBP116.5m and had
drawn GBP80.5m on its GBP280m Revolving Credit Facility. The
Company also had undrawn commitments on existing investments
collectively valued at GBP18.1m. As of 30 October 2020, the
Company's invested portfolio comprised of 60 private debt
investments and 12 infrastructure bonds across 8 sectors and 27
sub-sectors. It had an annualised yield-to-maturity (or
yield-to-worst in the case of callable bonds) of 9.6% and a cash
yield of 6.3%. Based on the Investment Adviser's analysis of our
current portfolio we continue to believe that our annual dividend
remains fully cash covered, net of all expenses. The weighted
average portfolio life is approximately 5.5 years. Private debt
investments represented 94% of the total portfolio and 62% of the
portfolio comprised floating rate assets. The weighted average
purchase price of the Company's investments was 97.0% of par.
Investments which are pre-operational represented 11.1% of total
assets.
The Company's invested portfolio remains geographically diverse
with 52% located across the US, 16% in the UK, 26% in Europe, and
6% 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 Company's settled investment activities during October
include:
-- An additional $0.1m disbursement to Bourzou Equity, a company
created for a data centre in Virginia.
The following Company's investments were sold or prepaid in
October:
-- A GBP8.5m loan to Forsa Energy, a company with a portfolio of
gas-fired flexible generation assets in the UK, at 106.5% of
purchase price; and
-- A EUR30.6m loan to Aliwin Plus SL, a portfolio of operational
solar PV plants in the Cáceres region of Spain.
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
(%)
AP Wireless Telecom
Junior EUR Private Mezz 62.4 TMT towers 4.25 6.25
Hawaiki Mezzanine Undersea
Loan USD Private Mezz 55.1 TMT cable 9.01 11.31
Warnow Tunnel EUR Private Senior 49.7 Transport Road 1.54 4.30
Expedient Data
Centers USD Private Senior 49.6 TMT Data centers 5.67 5.84
Euroports 2nd
Lien 2026 EUR Private Mezz 44.1 Transport Port 8.06 8.60
Scandlines
Mezzanine
2032 EUR Private HoldCo 43.5 Transport Ferries 6.95 7.67
Bannister Senior Health
Secured GBP Private Senior 42.1 Accom. care 6.58 6.77
Hawkeye Solar Solar
HoldCo 2030 USD Private HoldCo 42.1 Renewables & wind 9.25 9.25
Electricity
Bizkaia TL 2021 EUR Private HoldCo 41.2 Power generation 7.80 8.57
Jetpeaks HoldCo Electricity
2027 USD Private HoldCo 40.7 Power generation 7.49 8.02
Terra-Gen Power Solar
TL B USD Private Senior 40.5 Renewables & wind 5.34 6.75
Tracy Hills TL Residential
2025 USD Private Senior 39.9 Other infra 8.15 8.15
Adani Abbot
HoldCo
2021 AUD Private HoldCo 39.6 Transport Port 6.72 17.20
Kenai HoldCo Electricity
2024 EUR Private HoldCo 39.4 Power generation 0.00 11.60
Electricity
GenOn Bowline USD Private Senior 38.6 Power generation 8.00 8.00
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
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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END
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