REG - Sequoia Econ Infra - NAV and Investment Update

Sequoia Economic Infrastructure Income FundAnnouncement

15/08/2025 07:00

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RNS Number : 4312V  Sequoia Economic Infra Inc Fd Ld  15 August 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 - July 2025

 

 

The NAV per share for SEQI, the largest LSE listed infrastructure debt fund,
increased to 91.82 pence per share from the prior month's NAV per share of
90.84 pence, (being the 30 June 2025 cum-income NAV of 92.56 less the dividend
of 1.71875 pence per share declared in respect of the quarter ended 30 June
2025 and payable on 22 August 2025), representing an increase of 0.98 pence
per share.

                                        pence per share
 30 June NAV                            92.56
 Interest income, net of expenses                0.60
 Asset valuations, net of FX movements           0.36
 Subscriptions / share buybacks                  0.02
 Dividend                                       -1.72
 31 July NAV                                    91.82

 

 

No expected material FX gains or losses as the portfolio is approximately
100.8% 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; 57.5% of portfolio is in
fixed rate investments as of July 2025.

 

Market Summary - July 2025

 

Tariff Impact & Geopolitical Analysis

 

 ·             On 28 July, the U.S. and E.U. reached a trade framework that averted
               escalating tariff threats, finalising the deal just days before the 1 August
               deadline for new duties to take effect.

 ·             On 11 August (after month-end), President Trump signed an executive order
               extending the temporary pause on increased tariffs on Chinese goods by 90
               days, deferring the potential implementation to November 2025 and prompting
               cautious optimism for a more constructive, negotiated trade environment.

 ·             These actions have eased trade tensions, improved market sentiment, and
               reduced near-term volatility, providing a more stable backdrop for credit
               markets.

 

Interest Rate Announcements and Inflation Data

 

 ·             During July, the Bank of England, the Federal Reserve and European Central
               Bank all maintained policy rates, at 4.25%, 4.25% and 2.0% respectively. On 7
               August (after month-end), the Bank of England reduced its policy rate by 0.25%
               to 4.00%.

 ·             U.K. Gilts yields trended upwards during July, by approximately 0.2% to 4.7%.
               In the U.S., yields on Treasury notes ranged between 4.2% and 4.5% and closing
               at 4.4%, due to the ongoing tariffs concerns. The yield on the German Bund
               ranged between 2.5% and 2.7% during the same period, closing at 2.6%.

 ·             Despite higher yields across all three regions at month-end, the valuation of
               most fixed rate instruments still increased during the month, due to a
               sustained reduction in benchmark spreads, which was only partially offset by
               an increase in base rates.

 ·             In the U.K., the most recent data on CPI inflation shows that it rose from
               3.4% in May to 3.6% in June. In the US, CPI inflation held steady, at 2.7% in
               July. In the Eurozone, it rose from 1.9% in June to 2.0% in July.

 ·             In the near term, de-escalation of trade tensions is expected to help ease
               inflationary pressures. However, the impact of pre-tariff inventory building
               has made it harder to assess the true effect of tariffs on inflation and
               growth. Central banks are treading a very difficult tightrope between avoiding
               a recession and not reigniting inflation.

 ·             The pace and size of any interest rate reductions will vary across the
               Company's different investment jurisdictions, but the general consensus
               remains one of gradual easing over the course of the year, which would make
               alternative investments such as infrastructure relatively more attractive when
               compared to liquid debt.

 

Portfolio Update - July 2025

 

Revolving Credit Facility and Cash Holdings

 

 ·             As of 31 July 2025, the Company had drawn £114.5 million on its revolving
               credit facility of £300.0 million and had cash of £33.6 million (inclusive
               of interest income), and net undrawn investment commitments of £45.1million.

 

Portfolio Composition

 

 ·             The Company's invested portfolio consisted of 56 private debt investments and
               3 infrastructure bonds, diversified across 8 sectors and 29 sub-sectors.

 ·             56.1% of the portfolio is comprised of senior secured loans reflecting the
               Company's defensive positioning.

 ·             It had an annualised yield-to-maturity (or yield-to-worst in the case of
               callable bonds) of 9.91% and a cash yield of 7.34% (excluding deposit
               accounts).

 ·             The portfolio pull-to-par, which is incremental to NAV as loans mature, is 4.4
               pence per share as of July 2025.

 ·             The weighted average loan life is 3.0 years as of July. This short maturity
               profile means that as loans mature, the Company can take advantage of new
               lending opportunities.

 ·             Private debt investments represented 94.1% of the total portfolio, allowing
               the Company to capture illiquidity yield premiums.

 ·             The Company's invested portfolio currently consists of 42.5% floating rate
               investments and remains geographically diversified with 42.7% located across
               the U.S., 29.4% in the U.K. and 27.9% in Europe.

 

 

 

Portfolio Highly Diversified by Sector and Size

 

 

 

 

Share Buybacks

 

 ·             The Company bought back 2,051,766 of its ordinary shares at an average
               purchase price of 80.91 pence per share in July 2025.

 ·             The Company first started buying back shares in July 2022 and has bought back
               226,680,968 ordinary shares as of 31 July 2025, with the buyback continuing
               into August 2025. This share repurchase activity by the Company continues to
               contribute positively to NAV accretion.

 

New Investment Activity During July 2025

 

 ·             A HoldCo loan for €65.0 million to Project Murphy to support a bid for a
               majority stake in an interconnector between U.K. and Ireland. This is the
               first privately-owned project to benefit from cap & floor regulatory
               support jointly backed by U.K. and Irish regulators, making it a critical
               piece of energy infrastructure with strong downside protection. The loan,
               which has a total term of 18 months, is projected to deliver a YTM of
               approximately 7.5% upon redemption.

 ·             An additional senior loan to Tracy Hills Holdings Company LLC Facility B for
               $5.0 million. The borrower is a residential infrastructure developer in
               California. The YTM on this loan is 10.77%.

 ·             An additional senior loan to Sunrun Radcliffe for $1.4 million. The borrower
               is a leader in the U.S residential solar market. The YTM on this loan is
               13.42%

Investments that repaid during July 2025

 

 ·             The Company completed the full sale of Rand Parent LLC (Atlas Air) bonds for
               $28.9 million at a weighted average price of 99.95. The borrower is a New
               York-based global operator in the airfreight transportation services sector.
               The Investment Adviser took advantage of heightened market volatility to exit
               the position at an attractive valuation, mitigating potential impacts from
               further tariff announcements and broader market sell-offs. The annualised
               return on the investment was 12.54%.

 ·             A full repayment of ETT bonds for €19.4 million, a Term Loan B acquisition
               financing to a leading multi-utility service provider in the Netherlands.

Non-performing Loans

 

The Company continues to work towards maximising recovery from the
non-performing loans in the portfolio (equal to 0.6% 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/4312V_1-2025-8-14.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/4312V_1-2025-8-14.pdf)

http://www.rns-pdf.londonstockexchange.com/rns/4312V_2-2025-8-14.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/4312V_2-2025-8-14.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 5 pence in 2015 to 6.875 pence per share in 2023.
 ·             The fund has a comprehensive sustainability framework combining sustainability
               goals, a proprietary ESG scoring methodology, alongside 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)

 Elizabeth Snow

 Colette Cahill

 Alternative Investment Fund Manager (AIFM)            +44 (0)20 3530 3600

 FundRock Management Company (Guernsey) Limited        sequoia-aifm@fundrock.com (mailto:sequoia-aifm@fundrock.com)

 Dave Taylor

 Chris Hickling

 Administrator / Company Secretary                     +44 (0)20 3530 3600

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

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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.

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