SQN Asset Finance Income (SQN) made the following announcement with respect to the declaration of further dividend payments.
“In light of the ongoing uncertainty in economies and markets, the board of the company resolved today to suspend the declaration of further dividend payments on both the ordinary and C share classes until further notice. In order to conserve liquidity, no further dividends will be declared until further clarity on the impact of COVID-19 is available and the results of the strategic review are determined.
The dividends declared on 21 February 2020 and payable on 27 March 2020 will continue to be paid.
The Manager will be contacting the company’s borrowers to review and determine the extent to which COVID-19 is impacting their businesses and will be reporting to the board and shareholders in due course.
The Board believe that the preservation of liquidity is essential in the current uncertain environment.”
Update earlier today on SQN’s forward foreign exchange hedging
In a separate announcement earlier today,
SQN said it had instructed its manager to close out the forward foreign exchange hedging used to hedge non sterling exposures back to Sterling. The manager executed the instruction late yesterday. In recent days, the company has faced margin calls on its forward foreign exchange hedging as sterling has weakened notably. SQN noted: “The board is concerned to preserve liquidity in what is an extreme market and economic environment. Whilst no lessees or borrowers are yet exhibiting new stress as a result of the covid-19 virus and the exceptional governmental measures being taken, some are operating in sectors and geographies that could be adversely impacted. Accordingly, the board believes that it is in shareholders’ best interests to seek to preserve liquidity and act promptly and prudently now in advance of any further adverse foreign exchange moves which could create liquidity pressures for the company.”
SQN: SQN Asset Finance Income suspends declaration of further dividend payments