THE first listed bonds in Singapore that provide investors with exposure to a diversified portfolio of private equity (PE) funds have been successfully priced and launched.
The bonds, which were issued by Astrea III Pte Ltd, were subscribed by more than eight times for the US$510 million issue. Strong demand was seen from institutional investors including insurance companies, endowment funds and foundations, as well as individual investors. About one-third of the Astrea III PE bonds were allocated to individual investors.
Astrea III comprises four different classes of PE bonds: Class A-1, Class A-2, Class B and Class C, with interest rates of 3.9 per cent, 4.65 per cent, 6.5 per cent and 9.25 per cent per annum, respectively.
Class A-1 bonds, which are the most senior class of bonds, are expected to be rated "Asf" by Fitch Ratings and "A (sf)" by Standard & Poor's. Denominated in Singapore dollars, Class A-1 bonds have been designed as an investment-grade product that could potentially be made available to retail investors in future. Class A-2 and Class B bonds are also expected to be rated investment grade, while Class C bonds are not rated.
Astrea III Pte Ltd is sponsored by Astrea Capital Pte Ltd, a wholly owned subsidiary of Azalea Asset Management. Azalea is a wholly owned subsidiary of Singapore investment company Temasek Holdings.
Following the successful launch of Astrea I and Astrea II by Temasek in 2006 and 2014 respectively, Azalea was set up in 2015 to take on the role of development and innovation of investment products, based on diversified portfolios of PE funds. The Astrea platform is part of Azalea's phased approach to make PE portfolios more accessible to a broader range of investors.
Astrea III is managed by Fullerton Fund Management, a wholly owned and independently operated investment management subsidiary of Temasek.
Credit Suisse (Singapore) and DBS Bank are the lead managers for the Astrea III PE bond offering, while PJT Partners LP/Park Hill Group LLC is the financial and structuring adviser to Astrea III.