REG - Riverstone Credit - 4Q22 Portfolio Valuations & Recent Activity

Riverstone Credit Opportunities IncomeAnnouncement

25/01/2023 07:00

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RNS Number : 7498N  Riverstone Credit Opps. Inc PLC  25 January 2023

25 January 2023

Riverstone Credit Opportunities Income

Quarterly Update

Full Deployment Reached Despite Continued Successful Realisations

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 31 December 2022,
inclusive of updated quarterly unaudited fair market valuations.

 

Unaudited Net Asset Value

 

As of 31 December 2022, the unaudited net asset value per Ordinary Share,
including net revenue for the quarter ended 31 December, was $1.08 ($1.10: 30
September 2022). This reduction was principally due to a movement in the
valuation of an equity position.

 

Period Highlights

 

·    Established track record of attractive realisations continues:

o Circulus Solutions realised on 6 October 2022 at 16.6 percent gross IRR and
a 10.8 percent

    net IRR and 1.14x gross MOIC and a 1.09x net MOIC

o Hoover Circular Solutions initial investment realised on 30 November 2022 at
15.0 percent

   gross IRR and a 7.8 percent net IRR and a 1.10x gross MOIC and a 1.05x
net MOIC; in

   addition, loan amended and extended to 30 November 2026

·    Continues to invest capital in active pipeline of infrastructure,
infrastructure services and energy transition opportunities to keep the fund
substantially committed.

o On 30 November 2022, closed a new sustainability-linked first lien term loan
to Hoover

    Circular Solutions, which refinanced the prior position.

o On 22 December 2022, closed a sustainability-linked first lien term loan to
Clean Energy

    Fuels Corp. ("Clean Energy Fuels" or "CLNE"). At close on 22 December
2022, RCOI

    committed $13.9 million.

o On 30 December 2022, closed a $28.6 million sustainability-linked, first
lien term loan to

   a subsidiary of Max Midstream. At close on 30 December 2022, RCOI
committed $5.0

    million.

o Throughout Q4 2022, committed an additional $2.1 million of capital as part
of an upsize

   for Harland & Wolff Group Holdings PLC

·    Successfully closed a $15.0 million senior secured revolving credit
facility on 7 December 2022 aiming to further enhance returns.

 

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%

·    33.7% NAV total return(5) since IPO in May 2019 (14.5% annual return
for 2022)

·    22.6 cents in dividends paid since inception(6)

Market Update

·    With the strong backdrop of energy market performance, the important
global priority of de-carbonisation and the Company's unique focus on short
duration lending - the re-balancing of the portfolio to energy-transition
focused investments is now complete.

·    There was a slight reduction in our NAV per share in Q4 2022 versus
Q3 2022 ($1.10 to $1.08), due mainly to a reduction in the mark on the common
equity investment in Seawolf Water Resources. While the business remains
fundamentally healthy as it continues to expand into new markets, the
near-term outlook for its core business of brackish water supply was modestly
reduced, resulting in a decrease in valuation.

·    Based on the current portfolio commitments, as well as the addition
of the revolving credit facility, we believe the ability to maintain near full
deployment is achievable.

Reuben Jeffery III, Chairman of RCOI, commented:

"Q4 2022 was very encouraging for RCOI given further profitable realisations
as well as new commitments in our target sectors. I believe the Company is
well-positioned to continue to provide attractive returns from its portfolio
as well as through new senior secured investments from the considerable
pipeline of opportunities progressing through due diligence. Underlying rates
are as high as they've been in our history, and now with the Company's capital
fully deployed, we expect our shareholders to benefit from the increased
earnings power of the portfolio.

Since launch in May 2019, a period that has included challenging conditions
for equity investors, we are pleased that the Company has delivered a total
NAV return(5) of 33.7% (14.5% annual return for 2022) including 22.6 cents per
share in dividend distributions(6)."

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

"We achieved two key milestones in the fourth quarter. First, as of year-end,
RCOI's portfolio is now comprised almost exclusively of Green and
Sustainability-Linked loans, representing approximately 95% of NAV. Second,
with the closing of our revolving credit facility in December, the Company is
now able to better manage its liquidity needs, allowing for higher deployment
of capital. With the Max Midstream deal completed on the last business day of
the year, RCOI is now 102% committed and approaching 100% invested.

 

"In an active fourth quarter, RCOI had $23.9 million of realisations and
committed $34.6 million of new capital in four investments, a refinancing of
Hoover Circular Solutions, an upsize to Harland & Wolff Group Holdings
PLC, Clean Energy Fuels Corp., and Max Midstream. We are pleased to have
completed  over 10 deal realisations since the start of COVID, all with a
blended gross IRR of 17% (net IRR of 13%), demonstrating the resilience of our
investment strategy. We look forward to a productive 2023."

 

Cumulative Portfolio Summary

Unrealised Portfolio 1  (#_edn1)

 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 31 Dec 2022(2)  % of Par as of 30 Sept 2022(2)  31 Dec 2022 Gross MOIC  31 Dec 2022 Net MOIC
 Caliber Midstream(3)                        Infrastructure           Aug-19           4.0                                 4.0                                0.5                              0.5                           1.0                                                  40.72%                         40.71%                          0.25x                   0.20x
 Imperium3NY LLC                             Energy Transition        Apr-21           6.8                                 5.4                                6.7                              2.7                           9.4                                                  2.70(4)                        2.49(4)                         1.75x                   1.70x
 Blackbuck Resources LLC                     Infrastructure           Jun-21           11.5                                11.0                               2.3                              10.8                          13.1                                                 100.83%                        100.44%                         1.18x                   1.13x
 Streamline Innovations Inc.                 Infrastructure Services  Nov-21           13.8                                6.8                                1.0                              7.1                           8.0                                                  99.57%                         99.12%                          1.17x                   1.12x
 Harland & Wolff Group Holdings PLC          Infrastructure Services  Mar-22           14.6                                14.6                               1.2                              15.7                          16.8                                                 102.49%                        96.98%                          1.15x                   1.10x
 Seawolf Water Resources                     Services                 Sept-22          9.0                                 9.0                                0.1                              13.0                          13.1                                                 13.02(4)                       14.29(4)                        1.46x                   1.41x
 EPIC Propane Pipeline, LP                   Infrastructure           Sept-22          13.9                                13.9                               0.5                              13.9                          14.4                                                 99.08%                         99.00%                          1.04x                   0.99x
 Hoover Circular Solutions                   Infrastructure Services  Nov-22           13.7                                13.7                               0.1                              13.9                          14.0                                                 98.05%                         NA                              1.02x                   0.97x
 Clean Energy Fuels Corp                     Energy Transition        Dec-22           13.9                                13.9                               0.1                              13.9                          14.0                                                 99.00%                         NA                              1.01x                   0.96x
 Max Midstream                               Infrastructure           Dec-22           5.0                                 5.0                                0.1                              5.0                           5.1                                                  100.00%                        NA                              1.01x                   0.96x
                                                                                       $106.2                              $97.3                              $12.6                            $96.4                         $109.0                                                                                                              1.12x                   1.07x

                       Direct Lending Consolidated Portfolio Key Stats at Entry As of 31 December
                       2022
                       Weighted Avg. Entry Basis                                                                                                              97.5%
                       Weighted Avg. All-in Coupon at Entry                                                                                                   9.64 p.a.
                       Weighted Avg. Undrawn Spread at Entry                                                                                                  4.0 p.a.
                       Weighted Avg. Tenor at Entry                                                                                                           3.1 years
                       Weighted Avg. Call Premium at Entry                                                                                                    102.8
                       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)  31 Dec 2022 Gross MOIC  31 Dec 2022 Net MOIC
 Rocky Creek Resources      Exploration & Production      Jun-19           Dec-19            6.0                                 4.3                                4.9                              1.15 x                  1.10 x
 CIG Logistics              Infrastructure Services       Jan-20           Jan-20            8.7                                 8.7                                8.9                              1.02 x                  0.97 x
 Mallard Exploration        Exploration & Production      Nov-19           Apr-20            13.8                                6.8                                7.7                              1.13 x                  1.08 x
 Market Based               Multiple                      Aug-20           Nov-20            13.4                                13.4                               13.6                             1.01 x                  0.96 x
 Project Yellowstone        Infrastructure                Jun-19           Mar-21            5.8                                 5.8                                7.2                              1.23 x                  1.18 x
 Ascent Energy              Exploration & Production      Jun-19           Jun-21            13.3                                13.3                               16.1                             1.21 x                  1.16 x
 Pursuit Oil & Gas          Exploration & Production      Jul-19           Jun-21            12.3                                12.3                               15                               1.22 x                  1.16 x
 U.S. Shipping              Infrastructure Services       Feb-21           Aug-21            6.5                                 6.5                                7.3                              1.13 x                  1.07 x
 Aspen Power Partners       Infrastructure                Dec-20           Oct-21            6.9                                 3.4                                4.3                              1.27 x                  1.22 x
 Project Mariners           Infrastructure Services       Jul-19           Apr-22            13.2                                13.2                               17.6                             1.33x                   1.28 x
 Roaring Fork Midstream     Infrastructure                Mar-21           Jun-22            5.9                                 5.9                                6.9                              1.16x                   1.11 x
 FS Crude, LLC              Infrastructure                Mar-20           Sept-22           13.7                                13.7                               16.9                             1.23x                   1.18 x
 EPIC Propane Pipeline, LP  Infrastructure                Dec-19           Sept-22           14.8                                14.8                               19.6                             1.32x                   1.27 x
 Circulus Holdings, PBLLC   Infrastructure                Aug-21           Oct-22            12.3                                12.3                               14.0                             1.14x                   1.09 x
 Hoover Circular Solutions  Infrastructure Services       Oct-20           Nov-22            15.4                                15.4                               17.0                             1.10x                   1.05 x
                                                                                             $162.1                              $149.8                             $176.8                           1.18x                   1.13x

 

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:
Buchanan
 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.

(5) NAV total return equals cumulative paid dividend cents per share and NAV
per share as of 31 December 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 30 September
2022 and paid as of 31 December 2022.

 

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