REG - Sequoia Econ Infra - NAV and Investment Update

Sequoia Economic Infrastructure Income FundAnnouncement

07/06/2021 13:05

RNS Number : 7362Y
  
Sequoia Economic Infra Inc Fd Ld
  
17 May 2021
  
 

NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN WHOLE OR IN PART IN OR INTO THE UNITED STATES
 
17 May 2021
Sequoia Economic Infrastructure Income Fund Limited
("SEQI" or the "Company")
NAV update
The NAV for SEQI, the specialist investor in economic infrastructure debt, increased to 102.28 pence per share from the prior month's NAV of 101.62 pence per share (being the 31 March 2021 cum-income NAV of 103.18 pence less the dividend of 1.5625 pence per share declared in respect of the quarter ended 31 March 2021), representing an increase of 0.66 pence per share.
A full attribution of the changes in the NAV per share is as follows:







pence per share




March NAV


103.18




Dividend declared for quarter ending 31 March 2021


-1.56




Adjusted opening NAV


101.62




Interest income, net of expenses


0.58




FX movements, net of hedges


-0.06




Increase in asset valuations


0.14




April NAV


102.28



 
Portfolio update 
The Investment Adviser, the Investment Manager, and PWC, the independent valuation agent, have continued their close analysis of the effects of COVID-19 on the Company's portfolio which also includes a market benchmarking exercise to conclude on spread and yield adjustments for each of the investments.
In summary, spreads tightening driven by credit improvements was evident across various sectors in the portfolio which resulted in modest uplifts to valuations of the assets where COVID-19 has impacted performance and are still closely monitored by the Investment Adviser. The Investment Adviser expects this trend to persist as economies continue to recover and lockdowns start to ease globally.
As at 30 April 2021, the Company had cash of £104.2m and had drawn £83.9m on its £280m Revolving Credit Facility. The Company also had undrawn commitments on existing investments collectively valued at £71.1m. The Company's invested portfolio comprised of 61 private debt investments and 11 infrastructure bonds across 8 sectors and 30 sub-sectors. It had an annualised yield-to-maturity (or yield-to-worst in the case of callable bonds) of 9.1% and a cash yield of 5.6%. The weighted average portfolio life is approximately 4.4 years. Private debt investments represented 93% of the total portfolio and 55% of the portfolio comprised floating rate assets. The weighted average purchase price of the Company's investments was 98.9% of par. Investments which are pre-operational represented 11% of total assets.
The Company's invested portfolio remains geographically diverse with 48% located across the US, 19% in the UK, 26% in Europe, and 7% in Australia/New Zealand. Currently the Company is not investing in Portugal or Italy but has selectively invested in opportunities in Spain. The Company's pipeline of economic infrastructure debt investments remains strong and is diversified by sector, sub-sector, and jurisdiction.
At month end, approximately 100% of the Company's NAV consisted of either Sterling assets or was hedged into Sterling. The Company has adequate resources to cover margin calls on its hedging book.
The Company's settled investment activities during April include:
·      A $69.2m secondary loan secured on the assets of the stand-alone US domestic business of AP Wireless, a worldwide leading cell site lease investment firm. This investment complements our existing loan to the separate business housing the international operations of AP Wireless;
·      An initial $20.7m disbursement to Project Lanthanum, a leading developer of hyperscale data centres in Ashburn, Virginia; and
·      An additional $1.5m disbursement to Sunrun Safe Harbour, a portfolio of US rooftop solar systems.
The following assets sold or prepaid in April:
·      A $30m secondary loan to Flight Senior Secured, a company that operates in the e-vehicle space, predominantly based in the US but with customers around the globe; and
·      A $20m loan to vXchnge Investment, an operator of 14 data centres in the US.
 
 
 
 
Ordinary Portfolio Summary (15 largest settled investments)



Investment name


Currency


Type


Ranking


Value £m(1)


Sector


Sub-sector


Cash-on-cash yield (%)


Yield to maturity / worst (%)










































Madrid Metro 


EUR 


Private 


HoldCo 


65.4 


Transport assets 


Rolling stock 


1.32 


5.68 




Infinis Energy 


GBP 


Private 


Senior 


65.0 


Renewables 


Landfill gas 


5.00 


5.00 




AP Wireless Junior 


EUR 


Private 


Mezz 


61.4 


TMT 


Telecom towers 


4.22 


6.12 




Hawaiki Mezzanine Loan 


USD 


Private 


Mezz 


54.4 


TMT 


Undersea cable 


8.57 


9.60 




Tracy Hills TL 2025 


USD 


Private 


Senior 


53.3 


Other 


Residential infra 


8.11 


8.11 




Hawkeye Solar HoldCo 


USD 


Private 


HoldCo 


53.3 


Renewables 


Solar & wind 


8.25 


8.25 




AP Wireless US Holdco 


USD 


Private 


HoldCo 


50.0 


TMT 


Telecom towers 


6.00 


6.00 




Expedient Data Centers 


USD 


Private 


Senior 


46.5 


TMT 


Data centers 


5.63 


5.80 




Euroports 2nd Lien 2026 


EUR 


Private 


Mezz 


44.1 


Transport 


Port 


7.80 


7.90 




Care4U Senior Secured 


EUR 


Private 


Senior 


44.0 


Accomm. 


Health care 


6.00 


6.00 




Scandlines Mezzanine 


EUR 


Private 


HoldCo 


43.0 


Transport 


Ferries 


0.00 


9.11 




Adani Abbot HoldCo 


AUD 


Private 


HoldCo 


42.7 


Transport 


Port 


5.62 


30.08 




Bannister Senior Secured 


GBP 


Private 


Senior 


41.3 


Accomm. 


Health care 


6.54 


6.54 




Project Camden 


EUR 


Private 


HoldCo 


39.1 


Power 


Base load 


7.50 


7.50 




Kenai HoldCo 2024 


EUR 


Private 


HoldCo 


38.4 


Power 


Base load 


0.00 


12.55 



Note (1) - excluding accrued interest
The Company's monthly investor report and additional portfolio disclosure will be made available at http://www.seqifund.com/.
LEI: 2138006OW12FQHJ6PX91
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.
For further information please contact:
Sequoia Investment Management Company                              +44 (0)20 7079 0480
Steve Cook
Dolf Kohnhorst
Randall Sandstrom
Greg Taylor
Anurag Gupta
 
Jefferies International Limited                                                       +44 (0)20 7029 8000
Gaudi le Roux
Neil Winward
 
Tulchan Communications (Financial PR)                                    +44 (0)20 7353 4200
Martin Pengelley
Elizabeth Snow
Laura Marshall
 
Praxis Fund Services Limited (Company Secretary)               +44 (0) 1481 755530
Matt Falla
Katrina Rowe                                                                                        
About Sequoia Economic Infrastructure Income Fund Limited
The Company seeks to provide investors with regular, sustained, long-term distributions and capital appreciation from a diversified portfolio of senior and subordinated economic infrastructure debt investments. The Company is advised by Sequoia Investment Management Company Limited.

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