Azalea Investment Management – which is indirectly owned by Temasek Holdings – is offering $250 million of Astrea VI Class A-1 bonds at a fixed interest rate of 3% per annum to retail investors from 9am on 10 Mar.
This will close at noon on 16 Mar and the Class A-1 bonds are expected to start trading on the Singapore Exchange on 19 Mar.
This public offer follows the successful placement of $132 million of Class A-1 Bonds, US$228 million ($306.8 million) of Class A-2 Bonds and US$130 million of Class B Bonds to institutional and accredited investors.
The interest rates of Class A-2 Bonds are at 3.25% per annum, while that for Class B Bonds is 4.35%.
The issuer notes that the combined placement orderbook stood at US$3.2 billion equivalent from 149 accounts, with strong demand seen across all classes of bonds.
It adds that there was diversity in the distribution of the placement with participants from high quality institutions (67%) which includes insurance companies, asset managers, endowments and foundations, as well as accredited investors (33%).
Astrea VI is Azalea Asset Management’s third SGX-listed fund.
Its total offering size of US$643 million is backed by cash flows amounting to US$1.5 billion. This comes from a diversified portfolio of 35 private equity (PE) funds managed by 28 reputable general partners.
See also: Astrea VI PE bond fund with offer size of US$643 mil to be launched
Of these PE funds, 81% are buyout PE funds while the remaining 19% are growth equity PE funds.
Astrea VI’s diversified portfolio provides exposure to 802 companies that operate across a broad range of industry sectors.
The larger portfolio allows more PE bonds to be offered to retail investors while retaining a conservative capital structure, says Chue En Yaw, managing director and head of private equity funds at Azalea.
Agreeing, CEO Margaret Lui says she is happy to offer another series of Astrea PE Bonds to retail investors in Singapore.
“Astrea VI Class A-1 PE Bonds offer retail investors an opportunity to invest for their future, through an investment grade bond which provides regular income and exposure to private equity at the same time,” she says.
To this end, a significant portion or two thirds of the Class A-1 Bonds will be offered to retail investors, given the strong retail demand for the Class A-1 Bonds in the previous Astrea IV and Astrea V.
“Similar to the previous Astrea issuances, the placement to institutions and accredited investors, through the book building process, helped determine the interest rate. This is the same rate being offered to retail investors in respect of the Class A-1 Bonds,” Lui adds.
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The Class A-1 Bonds under Astrea VI will have a final maturity of 10 years and a Mandatory Call at the end of 5 years.
The Issuer will be required to redeem the Class A-1 Bonds on Mar 18 2026, if there is sufficient cash set aside to repay the Class A-1 Bonds and other conditions are satisfied. Otherwise, the interest rate on the Class A-1 Bonds will have a one-time step-up from 3% to 4% per annum after this date until the Class A-1 Bonds are fully redeemed.
Lui and Chue suggest that more offerings are to come on the Astrea Platform.
“Azalea will continue to further develop the Astrea Platform and innovate products of different risk profiles for both institutions and retail investors,” Lui quips.
