Temasek-tied Astrea V to offer S$180 million 3.85 percent bonds to retail investors

Stock ticker at SGX building on Shenton Way; taken October 2018.Stock ticker at SGX building.

Temasek-tied private-equity vehicle Astrea V will offer S$180 million class A-1 bonds at 3.85 percent for subscription to retail investors in Singapore, Astrea V and Azalea Investment Management said in a statement Tuesday.

The public offer follows the placement of S$135 million of class A-1 bonds, US$230 million of class A-2 bonds and US$140 million of class B bonds to institutional investors and accredited investors earlier Tuesday, the statement said.

The placement met with strong demand across all of the bond classes, with a combined orderbook of more than US$3.4 billion across 189 accounts, the statement said.

The orderbook for the placement tranche was 70 percent from high quality institutions, including insurance companies, endowment funds and foundations, with 30 percent from accredited investors, the statement said.

The bookbuilding process with the institutional and accredited investors determined the interest rate, which is the same rate being offered to retail investors, Margaret Lui, CEO of Azalea, said in the statement.

“Last year’s issuance of the Astrea IV PE bonds marked the first time retail investors in Singapore could invest in PE bonds, and we were very encouraged by the positive response from investors,” she said. “Today we are excited to bring the Astrea V Class A-1 PE Bonds, another series
of investment-grade rated bonds, to retail investors in Singapore as a continued effort to make PE more accessible to retail investors.”

The public offering of the bonds opens Wednesday and closes 18 June midday, with applications for multiples of S$1,000 and a minimum of S$2,000, the statement said. Trading is expected to being on SGX on 21 June, it said.

The class A-1 bonds have a final maturity of 10 years and a mandatory call after five years, if there is sufficient cash set aside to repay the securities, the statement said. If they aren’t redeemed in 2024, the interest rate will have a one-time step-up to 4.85 percent from 3.85 percent, the statement said.

Chue En Yaw, managing director and head of private equity funds at Azalea, said the bonds were backed by cash flows from a US$1.3 billion portfolio of investments in 38 private-equity funds, which provides exposure to 862 companies across a broad range of industries.

“This larger portfolio allows us to offer more PE bonds to Singapore retail investors while retaining a conservative capital structure,” Chue said in the statement.

Astrea V is part of the Astrea Platform, which is a series of investment products based on private equity funds’ portfolios. Astrea V was launched by Azalea Group, which is wholly owned by Singapore state-owned investment company Temasek.

Credit Suisse (Singapore), DBS Bank and Standard Chartered (Singapore) are the lead managers and underwriters for the bond offering, the statement said.

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