REG - Sequoia Econ Infra - NAV and Investment Update

Sequoia Economic Infrastructure Income FundAnnouncement

Mon 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:20250915:nRSO2325Za&default-theme=true

RNS Number : 2325Z  Sequoia Economic Infra Inc Fd Ld  15 September 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 FACTSHEET & COMMENTARY - AUGUST 2025

 

The NAV per share for SEQI, the largest LSE listed infrastructure debt fund,
increased to 92.48 pence per share from the prior month's NAV per share of
91.82 pence, representing an increase of 0.66 pence per share.

                                        pence per share
 31 July NAV                              91.82
 Interest income, net of expenses                0.78
 Asset valuations, net of FX movements          -0.14
 Subscriptions / share buybacks                  0.02
 31 August NAV                                  92.48

 

 

No expected material FX gains or losses as the portfolio is approximately 100%
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 current high interest rates; 58.5% of the
portfolio is in fixed rate investments as of August 2025.

 

Market Summary

 

 

Interest Rate Announcements and Inflation

 

 ·             During August, the Bank of England reduced the base rate by 0.25% to 4.0%.
               Market participants now expect just one more rate cut before the end of the
               year, reflecting persistent inflationary pressures and potential tax increases
               in the Autumn Budget (scheduled for late November) to plug the fiscal deficit.
               As a result, 10-year UK Gilts experienced an uptick of 0.20% to 4.70% by the
               month-end. Following the month end, there was a sharp sell-off in government
               bond markets with 30-year Gilt yields reaching their highest levels since
               1998, reflecting market concerns on the large fiscal deficit.

 ·             In contrast, the 10-year yields on German Bunds remained stable during the
               month as the ECB is expected to hold its policy rate at 2.0% in its upcoming
               September meeting given sluggish growth in the Eurozone and the impact from
               the U.S. - E.U. agreement on tariffs kicking in.

 ·             In the U.S., the yield on 10-year Treasuries trended up to c.4.30% in
               mid-month before closing at 4.20% at month-end, after the Federal Reserve
               signalled the likelihood of a further rate cut in September.

 ·             Despite credit markets remaining broadly flat during the month, the valuation
               of most U.S. based fixed rate instruments increased, due to a reduction in
               U.S. base rates. These gains were offset by the valuation of the Company's
               U.K. fixed rated investments, which declined due to an increase in base rates.

 ·             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 changes will vary across the Company's
               different investment jurisdictions. In the U.S., market participants currently
               expect a 0.25% cut in September, with further easing likely through the first
               quarter of 2026. In the U.K., inflation remains elevated, and the Bank of
               England is now widely expected to hold rates at current levels through early
               2026. In the Eurozone, the European Central Bank is similarly anticipated to
               maintain its current rate stance, with policy broadly on hold unless inflation
               abates further.

Tariff Impact & Geopolitical Analysis

 

 ·             Trade relations held steady during August. After the U.S.- E.U. agreement in
               July and the 11 August executive order extending the U.S. tariff pause to
               November, U.S.- China negotiations also remained on hold, with no new tariffs
               from the U.S. and no retaliatory measures from China. This broader easing of
               pressure helped sustain investor confidence and supported liquidity in
               secondary markets.

 ·             The steadier backdrop encouraged new issuance in credit markets, particularly
               among industrials and infrastructure-linked companies, which benefitted from
               reduced headline risk.

 ·             Looking ahead, U.S.- China trade policy remains a source of potential
               volatility in Q4. Market reactions to tariff-related headlines are likely to
               continue, though not at the intensity seen earlier in 2025.

 

Portfolio Update

 

Revolving Credit Facility and Cash Holdings

 

 ·             As of 31 August 2025, the Company had drawn £105.7 million on its revolving
               credit facility of £300.0 million and had cash of £17.5 million (inclusive
               of interest income), and net undrawn investment commitments of £93.7 million.
               The revolving credit facility is utilised for liquidity management and
               bridging purposes, rather than as a form of structural leverage.

 

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.

 ·             55.3% 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 10.11% and a cash yield of 7.43% (excluding deposit
               accounts).

 ·             The portfolio pull-to-par, which is incremental to NAV as loans mature, is 3.8
               pence per share as of August 2025.

 ·             The weighted average loan life is 3.1 years as of August.

 ·             Private debt investments represented 94.2% of the total portfolio, allowing
               the Company to capture illiquidity yield premiums.

 ·             The Company's portfolio remains geographically diversified with 43.9% located
               across the U.S., 26.9% in the U.K. and 29.2% in Europe.

 

 

Portfolio Highly Diversified by Sector and Size

 

 

 

 

 

 

 

Share Buybacks

 

 ·             The Company bought back 1,584,669 of its ordinary shares at an average
               purchase price of 79.69 pence per share in August 2025.

 ·             The Company first started buying back shares in July 2022 and has bought back
               228,265,637 ordinary shares as of 31 August 2025, with the buyback continuing
               into September 2025. This share repurchase activity by the Company continues
               to contribute positively to NAV accretion.

 

New Investment Activity During August 2025

 

 ·             A senior secured loan for €14.1 million and total commitments of €55.558
               million to finance the construction of a portfolio of ready-to-build Solar
               P.V. plants in Poland. Poland continues to robustly support the transition of
               its coal-dependant energy system and remains committed to its ambition of
               achieving long-term energy security and energy sustainability. The loan, which
               has a legal maturity of 3 years, is projected to deliver a YTM of
               approximately 8.9%. The transaction benefits from robust credit protections
               and strong track record of the sponsor in owning and operating renewable power
               assets in Europe.
 ·             An additional senior loan for $21.6 million to GenOn Bowline, to participate
               in the refinancing/upsizing of the loan. SEQI's total settled position on this
               loan is for $50 million. GenOn Bowline is a 1,145 MW natural gas and
               oil-fuelled power generation facility located in the greater New York City
               region. The YTM on this loan is 10.55%.

 ·             An additional Holdco loan to Sunrun for $9.45 million. The borrower is a
               leader in the U.S. residential solar market. The YTM on this loan is 13.44%.

               This loan forms part of an upsize to the warehousing facility, with SEQI's
               commitment increasing from $46m to $65m in March. SEQI's settled loan balance
               was $36.5 million as of 31 August.

               The facility supports Sunrun in purchasing residential solar equipment ahead
               of the expiration of solar investment tax credits in 2027.

 ·             An additional senior loan to ACG BidCo for £13.5 million, a U.K. national
               provider of accommodation and complex care services. The YTM on this loan is
               15.95%.

               Since SEQI became the majority equity owner of Active Care Group ("ACG") in
               May 2024, the company has made meaningful operational and financial progress
               against its turnaround strategy. This has been evidenced in part by CQC
               inspection ratings over the past 12 months, with 100% of services rated "Good"
               or "Outstanding," and ACG's return to operational profitability.

               As part of the turnaround strategy, ACG is implementing an asset optimisation
               programme designed to strengthen its balance sheet and invest in better
               aligning its portfolio with long-term growth opportunities, including in
               private neuro-rehabilitation facilities. SEQI believes this asset optimisation
               programme should enable ACG's management to increase the value of the business
               and thereby support recovery of the loan and upside potential for the
               business.

               To further support the turnaround strategy, and to provide the capital
               expenditure required for repositioning existing assets towards private
               neuro-rehabilitation facilities, SEQI has advanced this additional new funding
               to ACG. SEQI is in active discussions with co-lenders regarding their
               participation in this funding round.

               SEQI's total exposure to ACG following the provision of this new funding is
               £88.8m or 6.0% of NAV making it SEQI's largest exposure. The Board and
               Investment Adviser, with the support of the AIFM, will continue to closely
               monitor this and consider the strategy to manage the position to maximise
               value in the future.

 

Investments that repaid during August 2025

 

 ·             A full repayment of SEQI's senior loan to Workdry for £50 million. The
               borrower is the U.K.'s leading provider of essential and emergency water
               handling infrastructure solutions.

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
               additional announcements of non-performing loans 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/2325Z_1-2025-9-13.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/2325Z_1-2025-9-13.pdf)

http://www.rns-pdf.londonstockexchange.com/rns/2325Z_2-2025-9-13.pdf
(http://www.rns-pdf.londonstockexchange.com/rns/2325Z_2-2025-9-13.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 5 pence in 2015 to 6.875 pence per share.
 ·             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)

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.

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  MSCSFLFADEISEDU