REG - Riverstone Credit - 2Q22 Portfolio Valuations & Recent Activity

Riverstone Credit Opportunities IncomeAnnouncement

26/07/2022 08:00

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RNS Number : 7386T  Riverstone Credit Opps. Inc PLC  26 July 2022

26 July 2022

Riverstone Credit Opportunities Income

Quarterly Update

Strong Track Record of Attractive Realisations Continues

Share Buyback Programme Continues to Further Enhance Shareholder Value

Riverstone Credit Opportunities Income ("RCOI" or the "Company"), the
LSE-listed energy infrastructure and energy-transition credit investor, is
pleased to announce its quarterly portfolio summary as of 30 June 2022,
inclusive of updated quarterly unaudited fair market valuations.

 

Unaudited Net Asset Value

 

As of 30 June 2022, the unaudited net asset value per Ordinary Share,
including net revenue for the quarter ended 30 June, was $1.02 ($1.03: 31
March 2022). The reduction in NAV quarter over quarter is due to the larger
distribution paid out in quarter end 30 June 2022 for the period ending 31
March 2022.

 

Period Highlights

 

·    NAV remains stable with all loans performing in line with
expectations and delivering income as anticipated

·    Growing record of attractive realisations continues:

o Imperium3NY LLC investment realised delivering 32.5% IRR and 1.25x MOIC;
also retain non dilutable equity warrants with meaningful upside

o Roaring Fork investment realised delivering 21.3% IRR and 1.16x MOIC

o Project Mariners investment realised delivering 14.5% IRR and 1.33x MOIC

·    Successful upsize of RCOI's existing investment in Streamline
Innovations, bringing total capital committed by RCOI to $13.8m with
Sustainable Fitch providing an SPO on the green loan

·    RCOI initiated a share buyback programme to underline the Board's
confidence of the strategy's high performing and differentiated approach and
to enhance shareholder value

·    Growing pipeline of attractive investment opportunities across the
infrastructure, infrastructure services and energy transition sectors

 

Portfolio Summary / Lifetime Key Performance Indicators

 

·    Portfolio of 100% floating rate, short duration, senior secured loans
supporting RCOI's ambition to deliver annual returns to shareholders of 8-10%

·    23.4% NAV total return(5) since IPO in May 2019

·    18.6 cents in dividends paid since inception(6)

Market Update

·    The backdrop for the broader energy sector remained strong in Q2
2022, continuing the trend seen in the beginning of 2022. Given our focus on
energy infrastructure, infrastructure services and energy transition assets,
RCOI is well-diversified and poised to take advantage of the investment
opportunity brought about by the convergence of two market phenomena, namely
the consistent growing demand for sources of energy and the concurrent need to
meet global "net-zero" targets. Similar to Q1 2022, Q2 2022 saw a slight
increase in the unrealised values across the loan portfolio. We will continue
to target similar investment opportunities through our green loans and
sustainability linked loans with sustainability performance targets.

·    Based on the current unfunded commitments, recent deal activity and
potential new investment opportunities, the Investment Manager believes RCOI
will remain close to fully committed throughout 2022.

Reuben Jeffery III, Chairman of RCOI, commented:

"Q2 2022 was a very strong quarter producing the third loan realisation of
2022, all of which have achieved strong returns and delivered an average Gross
MOIC of 1.27x. In addition, energy market fundamentals, with strong commodity
pricing, remain encouraging for RCOI's strategy. Reflecting this supportive
backdrop, the Company is poised to continue to provide attractive returns from
its existing portfolio as well as through new senior secured investments from
Riverstone Credit's extensive pipeline.

Since launch the Company has delivered a total NAV return(5) of 23.4%
including 18.6 cents per share in dividend distributions(6). In addition,
while short duration, the portfolio's 100% floating rate exposure should be
expected to form a tailwind in enhancing portfolio income in a higher interest
rate environment."

Christopher Abbate and Jamie Brodsky, Co-Founders of Riverstone Credit, the
investment adviser, added:

"The RCOI existing portfolio and pipeline remains focused on the three key
sectors for the strategy, infrastructure, infrastructure services and energy
transition. In the second quarter of 2022, RCOI realised its investments in
Imperium3 NY, Roaring Fork and Project Mariners resulting in IRRs of 32.5%,
21.3% and 14.5% respectively.

Based on the growing track record of attractive realisation multiples, we
believe that going forward our portfolio income will be sufficient to grow
RCOI while preserving principal and in addition to delivering on our dividend
target.

We also are pleased to report two of our existing loans that were successfully
upsized, Streamline and post-period end, Blackbuck Resources. Further, these
loans were awarded Second Party Opinions ("SPO") by Sustainable Fitch,
Sustainable Fitch, a division of Fitch Group focused on ESG. For Blackbuck,
the SPO considers the loans to be aligned with the five pillars of the LSTA
Sustainability-Linked Loan Principles. For Streamline, the SPO verifies the
Term Loan's alignment to the LSTA Green Loan Principles with the transaction
being compliant with the four pillars of the LSTA Green Loan Principles and
aligned with the LSTA category of pollution and prevention. We are delighted
to receive this endorsement of the sustainability credentials of these energy
transition loans, a growing aspect of the Company's portfolio and future
pipeline."

Cumulative Portfolio Summary

Unrealised Portfolio 1 

 

 Investment Name                         Subsector                Commitment Date  Cumulative Committed Capital ($mm)  Cumulative Invested Capital ($mm)  Gross Realised Capital ($mm)(1)  Gross Unrealised Value ($mm)  Gross Realised Capital & Unrealised Value ($mm)      % of Par as of 30 June 2022(2)  Gross MOIC
 Caliber Midstream(3)                    Infrastructure           Aug-19           4.0                                 4.0                                0.5                              0.6                           1.1                                                  56.35%                          0.27x
 Epic Propane Pipeline                   Infrastructure           Dec-19           14.8                                14.8                               3.4                              15.4                          18.8                                                 101.50%                         1.27x
 FS Crude                                Infrastructure           Mar-20           13.7                                13.7                               9.7                              6.8                           16.5                                                 100.07%                         1.20x
 Hoover Circular Solutions               Infrastructure Services  Oct-20           7.4                                 7.4                                4.4                              3.9                           8.3                                                  99.89%                          1.13x
 Imperium3NY LLC                         Energy Transition        Apr-21           6.8                                 5.4                                6.7                              1.2                           8.0                                                  1.24(4)                         1.48x
 Blackbuck Resources LLC                 Infrastructure           Jun-21           11.5                                10.2                               1.7                              9.8                           11.5                                                 99.58%                          1.12x
 Circulus Holdings, PBLLC                Infrastructure           Aug-21           12.3                                12.3                               4.0                              9.3                           13.4                                                 99.63%                          1.09x
 Streamline Innovations Inc.             Infrastructure Services  Nov-21           13.8                                6.8                                0.4                              6.9                           7.3                                                  98.69%                          1.07x
 Harland & Wolff Group Holdings PLC      Infrastructure Services  Mar-22           11.8                                10.1                               0.4                              10.1                          10.6                                                 98.24%                          1.05x
                                                                                   $96.2                               $84.6                              $31.2                            $64.2                         $95.4                                                                                1.13x

 

 Direct Lending Consolidated Portfolio Key Stats at Entry As of 30 June 2022
 Weighted Avg. Entry Basis              96.9%
 Weighted Avg. All-in Coupon at Entry   9.52 p.a.
 Weighted Avg. Undrawn Spread at Entry  4.3 p.a.
 Weighted Avg. Tenor at Entry           2.9 years
 Weighted Avg. Call Premium at Entry    103.2
 Security                               100% Secured

Realised Portfolio

 Investment Name         Subsector                     Commitment Date  Realisation Date  Cumulative Committed Capital ($mm)  Cumulative Invested Capital ($mm)  Gross Realised Capital ($mm)(1)  Gross MOIC
 Rocky Creek Resources   Exploration & Production      Jun-19           Dec-19            6                                   4.3                                4.9                              1.15 x
 CIG Logistics           Infrastructure Services       Jan-20           Jan-20            8.7                                 8.7                                8.9                              1.02 x
 Mallard Exploration     Exploration & Production      Nov-19           Apr-20            13.8                                6.8                                7.7                              1.13 x
 Market Based            Multiple                      Aug-20           Nov-20            13.4                                13.4                               13.6                             1.01 x
 Project Yellowstone     Infrastructure                Jun-19           Mar-21            5.8                                 5.8                                7.2                              1.23 x
 Ascent Energy           Exploration & Production      Jun-19           Jun-21            13.3                                13.3                               16.1                             1.21 x
 Pursuit Oil & Gas       Exploration & Production      Jul-19           Jun-21            12.3                                12.3                               15                               1.22 x
 U.S. Shipping           Infrastructure Services       Feb-21           Aug-21            6.5                                 6.5                                7.3                              1.13 x
 Aspen Power Partners    Infrastructure                Dec-20           Oct-21            6.9                                 3.4                                4.3                              1.27 x
 Project Mariners        Infrastructure Services       Jul-19           Apr-22            13.2                                13.2                               17.6                             1.33x
 Roaring Fork Midstream  Infrastructure                Mar-21           Jun-22            5.9                                 5.9                                6.9                              1.16x
                                                                                          $105.9                              $93.6                              $109.4                           1.17x

The Gross Realised Capital column includes interest, fee income, and principal
received. The Gross Unrealised Value column includes the amortization of OID,
accrued interest, fees and any unrealised change in the value of the
investment.

For Riverstone Credit Opportunities Income Plc:

 

Adam Weiss

+1 212 271 2953

 

 

 J.P. Morgan Cazenove (Corporate Broker)   +44 (0)20 7742 4000
 William Simmonds
 Jérémie Birnbaum
 James Bouverat (Sales)

 
 
Media Contacts

 

 Helen Tarbet    Tel: +44 (0) 20 7466 5109
 Henry Wilson    Tel: +44 (0) 20 7466 5111
 Jon Krinks      Tel: +44 (0) 20 7466 5199
 Verity Parker   Tel: +44 (0) 20 7466 5197
                 Email:
                 rcoi@buchanan.uk.com (mailto:rcoi@buchanan.uk.com)

 

About Riverstone Credit Opportunities Income Plc:

 

RCOI lends to companies that build and operate the infrastructure used to
generate, transport, store and distribute both renewable and conventional
sources of energy, and companies that provide services to that infrastructure.
RCOI also lends to companies seeking to facilitate the energy transition by
decarbonizing the energy, industrial and agricultural sectors, building
sustainable infrastructure and reducing or sequestering carbon emissions. The
Company seeks to ensure that its investments are having a positive impact on
climate change by structuring each deal as either a green loan or a
sustainability-linked loan, documented using industry best practices.

 

For further details, see https://www.riverstonecoi.com/
(https://www.riverstonecoi.com/) .

 

Neither the contents of RCOI's website nor the contents of any website
accessible from hyperlinks on the websites (or any other website) is
incorporated into, or forms part of, this announcement.

 

(#_ednref1) 1 Gross realised capital is total gross income realised on
invested capital.

(2) Includes fair market value of equity and rights where applicable as a
percentage of par.

(3) Includes Caliber HoldCo Escrow, Caliber MFC LLC equity, Caliber Midstream
Revolver & Priming Facility.

(4) Reflects the total fair market value in millions of iM3NY common equity
and C4V common equity. The term loan was realized in April 2022.

(5) NAV total return equals cumulative paid dividend cents per share and NAV
per share as of 30 June 2022 divided by the opening capital net of share
issuance costs as of 28 May 2019.

(6) Reflects cumulative dividend cents per share declared as of 31 March 2022
and paid as of 30 June 2022.

 

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