Highlights from Sequoia Economic Infrastructure’s interim results – Sequoia Economic Infrastructure’s (SEQI) focus is in economic infrastructure, which includes transportation, utility, power, telecommunication, renewable and other related sectors that exhibit infrastructure characteristics and typically have demand exposure. Sequoia believes that lending into these sectors is more attractive than lending into availability-based PFI/PPP projects, which are often hotly contested among lenders and therefore offer lower yields.
Increased dividend target
SEQI reported half-year results to 30 September 2019 this morning, with highlights from the release including:
- SEQI says its portfolio is diversified across 78 investments in 8 sectors, 30 sub-sectors and 13 mature jurisdictions, with 88% of investments in private debt;
- Dividends of 3.0625p per ordinary Share paid during the period; increased dividend target from 6p to 6.25p per share announced in May 2019 (click here to read more on this story);
- Two major equity issuances over the period:
- Raised gross proceeds of £216.0m in June 2019;
- Raised gross proceeds of £138.8m in September 2019.
Outlook statement from chairman, Robert Jennings: “Over the first half of this financial year, the company has operated in relatively calm macroeconomic environments across the US, the UK and Europe compared to the end of 2018, when the global corporate bond and loan markets declined, caused by a flight of capital to lower risk investments. The bond and loan markets have since recovered, but signs of economic slowdowns are beginning to surface along with social unrest in some emerging and mature markets, catalysed by climate change, wealth inequality, and claims of corruption.
Despite these threats, the company is well-positioned to continue performing as it has done during other bouts of volatility throughout the first four-and-a-half years of its life.
Some developing macro-economic and political themes may be advantageous to the company, such as a renewed focus on infrastructure spending by the US Government and other OECD countries, and a strong US economy in which the company holds approximately 49% of its investments.
Whilst many of the above risks continue to be present, it is in such periods of volatility that the stability of infrastructure debt has historically demonstrated its real value to investors.”
SEQI: Highlights from Sequoia Economic Infrastructure’s interim results