REG - Sequoia Econ Infra - NAV and Investment Update

Sequoia Economic Infrastructure Income FundAnnouncement

Today 07:00

For best results when printing this announcement, please click on link below:
https://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20250616:nRSP8473Ma&default-theme=true

RNS Number : 8473M  Sequoia Economic Infra Inc Fd Ld  16 June 2025

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO
THE UNITED STATES

 

 

Sequoia Economic Infrastructure Income Fund Limited ("SEQI" or the "Company")

 

Monthly NAV and portfolio update - May 2025

 

 

The NAV per share for SEQI, the largest LSE listed infrastructure debt fund,
increased to 91.79 pence per share from the prior month's NAV per share of
91.32 pence, (being the 30 April 2025 cum-income NAV of 93.04 less the
dividend of 1.71875 pence per share declared in respect of the quarter ended
31 March 2025 and payable on 30 May 2025 1  (#_ftn1) ), representing an
increase of 0.47 pence per share.

 

                                        pence per share
 30 April NAV                           93.04
 Interest income, net of expenses                0.64
 Asset valuations, net of FX movements          -0.21
 Subscriptions / share buybacks                  0.04
 Dividend                                       -1.72
 31 May NAV                                     91.79

 

 

No expected material FX gains or losses as the portfolio is approximately
100.1% currency-hedged. However, the Company's NAV may include unrealised
short-term FX gains or losses, driven by differences in the valuation
methodologies of its FX hedges and the underlying investments - such movements
will typically reverse over time.

 

Well positioned to benefit from high interest rates; 58.6% of portfolio is in
fixed rate investments as of May 2025.

 

Market Summary - May 2025

 

Tariff Impact & Geopolitical Analysis

 

 ·             A 90-day pause in U.S.- China tariff escalation, announced in May 2025
               alongside initial mutual tariff reductions, marked a significant step toward
               easing global trade tensions.

 ·             Senior U.S. and Chinese officials also met in London on 9-10 June, holding two
               days of constructive talks that produced a provisional framework deal aimed at
               reducing trade barriers and advancing long-term economic cooperation.

 ·             While geopolitical uncertainty persists, recent developments, including
               President Trump's indication that tariffs are unlikely to return to peak
               levels, offer cautious optimism for improved trade stability and macroeconomic
               conditions.

 ·             Infrastructure is broadly recognised as a defensive asset class, typically
               exhibiting resilience during periods of market volatility. SEQI's portfolio is
               deliberately positioned to reflect this, with minimal exposure to more
               cyclical subsectors such as oil refining, aviation, and container ports. As of
               May 2025, 54.7% of the Company's investments are concentrated in traditionally
               defensive areas, including renewables, digital infrastructure, utilities, and
               accommodation.

 

 

Interest Rate Announcements and Inflation Data

 

 ·             On 8 May, the Bank of England reduced its base rate by 0.25% to 4.25%, while
               the Federal Reserve and the European Central Bank (the ECB) maintained their
               policy rates during the month. On 6 June (after month-end), the ECB lowered
               interest rates by 0.25%, to 3.75%.

 ·             Yields on 10-year U.S. Treasury notes fluctuated between 4.2% and 4.6% during
               May, reflecting ongoing concerns around trade tariffs and their inflationary
               impact. The yield ended the month at approximately 4.4%, around 0.2% higher
               than at end-April. U.S. CPI inflation also edged up to 2.4% in May, from 2.3%
               in April.

 ·             Similarly, yields on 10-year UK Gilts rose by approximately 0.2%, reaching
               4.65% by month-end. This increase was driven by stronger-than-expected
               inflation in April 2025, which rose to 3.5%, up from 2.6% in March. Meanwhile,
               the yield on 10-year German bunds remained steady at 2.5% month-on-month.
               Eurozone CPI inflation fell more than expected, declining from 2.2% in April
               to 1.9% in May, below the ECB's 2.0% target.

 ·             In the near term, the temporary trade agreement between the U.S. and China,
               which includes a significant reduction in tariffs, is expected to further ease
               some inflationary pressures. While headline inflation remains influenced by
               residual supply chain effects and sector-specific dynamics, the de-escalation
               in trade tensions has tempered expectations of further price shocks stemming
               from import costs.

 ·             As inflation gradually abates over time, the likelihood of future interest
               rate cuts increases, making alternative investments such as infrastructure
               more attractive when compared to liquid debt. While the pace and size of
               interest rate cuts will vary across the Company's different investment
               jurisdictions, the general consensus remains one of declining interest rates
               throughout the year.

Portfolio Update - May 2025

 

Revolving Credit Facility and Cash Holdings

 

 ·             As of May 2025 month-end, the Company had drawn £76.4 million on its
               revolving credit facility of £300.0 million and had cash of £11.1 million
               (inclusive of interest income), and undrawn investment commitments of £117.8
               million.

 

Portfolio Composition

 

 ·             The Company's invested portfolio consisted of 54 private debt investments and
               5 infrastructure bonds, diversified across 8 sectors and 29 sub-sectors.

 ·             59.5% of the portfolio is comprised of senior secured loans ensuring defensive
               positioning.

 ·             It had an annualised yield-to-maturity (or yield-to-worst in the case of
               callable bonds) of 10.03% and a cash yield of 7.43% (excluding deposit
               accounts).

 ·             The portfolio pull-to-par, which is incremental to NAV as loans mature, is 4.5
               pence per share as of May 2025.

 ·             The weighted average portfolio life increased marginally to 3.5 years. This
               short duration means that as loans mature, the Company can take advantage of
               higher yields in the current interest rate environment.

 ·             Private debt investments represented 91.0% of the total portfolio, allowing
               the Company to capture illiquidity yield premiums.

 ·             The Company's invested portfolio currently consists of 41.4% floating rate
               investments and remains geographically diversified with 44.8% located across
               the U.S., 25.4% in the U.K. and 29.8% in Europe.

 

 

 

Portfolio Highly Diversified by Sector and Size

 

 

 

 

 

 

 

 

 

Share Buybacks

 

 ·             The Company bought back 4,090,820 of its ordinary shares at an average
               purchase price of 76.55 pence per share in May 2025.

 ·             The Company first started buying back shares in July 2022 and has bought back
               222,565,365 ordinary shares as of 31 May 2025, with the buyback continuing
               into June 2025. This share repurchase activity by the Company continues to
               contribute positively to NAV accretion.

 

New Investment Activity During May 2025

 

 ·             Refinancing of Expedient for $65 million with a 5-year tenor. The loan
               provided to the borrower is part of a facility size of $400m Term Loan and
               $30m RCF. Expedient manages 15 Tier III data centres that support roughly
               1,300 clients in the U.S.

 ·             An additional senior loan to Grange Backup Power Ltd for €5.4 million. The
               borrower is an Irish power asset linked to a data centre.

 ·             An additional senior loan to Sunrun Radcliffe for $6.0 million. The borrower
               is a leader in the US residential solar market.

No investments repaid during May 2025

 

 

Non-performing Loans

 

The Company continues to work towards maximising recovery from the
non-performing loans in the portfolio (equal to 1.0% of NAV): There are no new
announcements this month.

 

 

Top Holdings

 

 

 

Valuations are independently reviewed each month by PWC.

 

Full list of SEQI's Portfolio Holdings and SEQI Monthly Factsheet

http://www.rns-pdf.londonstockexchange.com/rns/8473M_1-2025-6-13.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/8473M_1-2025-6-13.pdf)

http://www.rns-pdf.londonstockexchange.com/rns/8473M_2-2025-6-13.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/8473M_2-2025-6-13.pdf)

 

About Sequoia Economic Infrastructure Income Fund Limited

 

 ·             SEQI is the U.K.'s largest listed debt investor, investing in economic
               infrastructure private loans and bonds across a range of industries in stable,
               low-risk jurisdictions, creating equity-like returns with the protections of
               debt.
 ·             It seeks to provide investors with regular, sustained, long-term income with
               opportunity for NAV upside from its well diversified portfolio. Investments
               are typically non-cyclical, in industries that provide essential public
               services or in evolving sectors such as energy transition, digitalisation or
               healthcare.
 ·             Since its launch in 2015, SEQI has provided investors with ten years of
               quarterly income, consistently meeting its annual dividend per share target,
               which has grown from 5p in 2015 to 6.875p per share in 2023.
 ·             The fund has a comprehensive ESG programme combining proprietary ESG goals,
               processes and metrics with alignment to key global initiatives.
 ·             SEQI is advised by Sequoia Investment Management Company Limited (SIMCo), a
               long-standing investment advisory team with extensive infrastructure debt
               origination, analysis, structuring and execution experience.
 ·             SEQI's monthly updates are available here: Monthly Updates -
               seqi.fund/investors/monthly-updates
               (https://www.seqi.fund/investors/monthly-updates/)

 

 

 

For further information please contact:

 

 Investment Adviser                                    +44 (0)20 7079 0480

 Sequoia Investment Management Company Limited         pm@seqimco.com (mailto:pm@seqimco.com)

 Steve Cook

 Dolf Kohnhorst

 Randall Sandstrom

 Anurag Gupta

 Matt Dimond

 Joint Corporate Brokers and Financial Advisers        +44 (0)20 7029 8000

 Jefferies International Limited

 Gaudi Le Roux

 Harry Randall

 J.P. Morgan Cazenove                                  +44 (0)20 7742  4000

 William Simmonds

 Jérémie Birnbaum

 Public Relations                                      +44 (0)20 7260 2700

 Teneo (Financial PR)                                  sequoia@teneo.com (mailto:sequoia@teneo.com)

 Martin Pengelley

 Elizabeth Snow

 Faye Calow

 Alternative Investment Fund Manager (AIFM)            +44 ( (tel:+44%2020%203530%203626) 0) (tel:+44%2020%203530%203626) 20 35303

                                                      626 (tel:+44%2020%203530%203626)
 FundRock Management Company (Guernsey) Limited

 Dave Taylor

+44 ( (tel:+44%2020%203530%203626) 0) (tel:+44%2020%203530%203626) 20 35303
 Chris Hickling                                        626 (tel:+44%2020%203530%203626)

+44 ( (tel:+44%2020%203530%203626) 0) (tel:+44%2020%203530%203626) 20 35303
                                                       626 (tel:+44%2020%203530%203626)

sequoia-aifm@fundrock.com (mailto:sequoia-aifm@fundrock.com)
 Administrator / Company Secretary                     +44 (0)20 3530 3107

 Apex Fund and Corporate Services (Guernsey) Limited   Admin.Sequoia@apexgroup.com (mailto:Admin.Sequoia@apexgroup.com)

 +44 ( (tel:+44%2020%203530%203626) 0) (tel:+44%2020%203530%203626) 20 35303
 626 (tel:+44%2020%203530%203626)

sequoia-aifm@fundrock.com (mailto:sequoia-aifm@fundrock.com)

 

 

Administrator / Company Secretary

Apex Fund and Corporate Services (Guernsey) Limited

 

+44 (0)20 3530 3107

Admin.Sequoia@apexgroup.com (mailto:Admin.Sequoia@apexgroup.com)

 

 

 

 

 

 

 

 

 

This announcement is not for publication or distribution, directly or
indirectly, in or into the United States of America. This announcement is not
an offer of securities for sale into the United States.  The securities
referred to herein have not been and will not be registered under the U.S.
Securities Act of 1933, as amended, and may not be offered or sold in the
United States, except pursuant to an applicable exemption from registration.
No public offering of securities is being made in the United States.

 1  (#_ftnref1) Given that the dividend was announced on 17 April 2025, the
ex-dividend date for the interim dividend of 1.71875 pence per share is 1 May
2025 (based on the Dividend Procedure Timetable for 2025
(https://docs.londonstockexchange.com/sites/default/files/documents/dividend-procedure-timetable-2025.pdf)
). As such, the dividend payment is reflected in the NAV decomposition table
for May 2025, instead of April 2025.

 

This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact
rns@lseg.com (mailto:rns@lseg.com)
 or visit
www.rns.com (http://www.rns.com/)
.

RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
.   END  NAVSFSFIDEISESM