Sequoia Economic Infrastructure makes further progress in first half

13th Dec 2018 08:43

(Sharecast News) - Sequoia Economic Infrastructure Income Fund issued its interim results for the period from 1 April to 30 September on Thursday, reporting an annualised portfolio yield-to-maturity of 8.4% as at period end.The FTSE 250 company paid dividends of 3p per ordinary share during the six months, and raised gross proceeds of £75.7m through an oversubscribed placing in May.It said its diversified portfolio now contained 58 investments across eight sectors, 25 sub-sectors and 13 mature jurisdictions.Of those investments, 87% were in private debt and 66% were floating rate investments, which captured short-term rate rises.They carried a short-weighted average life of five years, which the board said created re-investment opportunities, with a weighted average equity cushion of 32%.Sequoia's ongoing charges ratio was 1.06%, calculated in accordance with AIC guidance, with the ongoing charges ratio against the average gross value of the portfolio in the period standing at 0.98%.Looking at the books, the company's net asset value per ordinary share stood at 101.86p at period end, while its ordinary share price was 110.5p, giving an ordinary share premium to net asset value of 8.5%.Post-period-end, Sequoia, announced an additional capital raise in August, which closed significantly oversubscribed in October, with gross proceeds of £253m.Proceeds from that were used to repay the outstanding balance of approximately £116m of the £150m multi-currency revolving credit facility.Remaining proceeds would be deployed into the "strong pipeline" of attractive investment opportunities, the board explained."The board is pleased with the company's continued progress in the first half of this financial year," said chairman Robert Jennings."Economic infrastructure debt remains an underinvested and attractive asset class, given its low correlation to the volatility of the wider equity markets and high recovery rates."Jennings said the balance of floating rate and shorter-term fixed investments meant that the portfolio was also "well-positioned" to benefit from a rising interest rate environment."We remain confident in the investment adviser's ability to grow the diversified portfolio and source high quality, stable, cash generative economic infrastructure debt investment opportunities that will enable us to maintain portfolio yield at 8% or higher and an annual dividend of 6p per share."