Sequoia Economic Infrastructure Income Fund's board has executed an 18-month £40 million secured loan with JP Morgan Chase Bank, London Branch.
The proceeds of the loan are to be used in or towards the making of investments in accordance with the company's investment policy.
The investment adviser continues to see attractive opportunities for the deployment of capital in the economic infrastructure debt sector, and expects the overall yield on the portfolio to remain eight per cent. or higher.
There is potential to increase the size of the loan in the future, once the loan proceeds have been fully deployed. 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.
Interest on the loan is charged at a rate of LIBOR plus 2.5% per annum. There are no upfront fees or commitment fees payable on the loan, however a fee is payable upon early prepayment. Under certain circumstances half of this prepayment fee may be credited against the interest expense of potential future loans between the company and JP Morgan.
The loan imposes an asset cover test on the company and is secured by a charge over the bank accounts of the company, a charge over the shares in Sequoia IDF Asset Holdings held by the company and a charge on the assets of the subsidiary.
(LON:SEQC) Sequoia Economic Infrastructure Income Fund Limited C Shs Npv share price was -0.75p at 109.25p
(LON:SEQI) Sequoia Economic Infrastructure Income Fund Limited Ord Npv share price was -0.12p at 114.88p