Sequoia secures new revolving credit facility – The board of Sequoia Economic Infrastructure Income Fund Limited has announced that it has secured a multi-currency Revolving Credit Facility (“RCF”) of GBP100 million from The Royal Bank of Scotland International Limited (Mandated Lead Arranger), ING Bank and Investec (Arrangers).
The tenor of the RCF will be three years, commencing on 6 December 2017 with a borrowing cost of 210 basis points over LIBOR. An arrangement fee will be payable in addition to a commitment fee on the undrawn portion of the RCF. The Company will retain the flexibility to increase the amount of the RCF by virtue of having structured a further GBP50 million incremental accordion tranche. The Company has repaid its existing GBP40 million secured loan with JP Morgan Chase Bank in full.
The facility will be used for working capital purposes and to fund investments in accordance with the Company’s investment policy. The RCF will enable the Company to reduce cash drag by buying assets through the use of leverage with the intention to pay this down in the future through equity issuance.
The RCF imposes an interest cover test and a loan to value test on the Company and is secured by, inter alia, a charge over the bank accounts of the Company, a charge over the shares in Sequoia IDF Asset Holdings S.A. (the “Subsidiary”) held by the Company and a charge on the assets of the Subsidiary. In accordance with the Company’s Investment Policy, any borrowings undertaken by the Company will not exceed 20 per cent. of the value of the assets of the Company less its liabilities.
SEQI : Sequoia secures new revolving credit facility