Astrea VI PE-backed bonds 3.1 times subscribed

ASTREA VI, the latest issuance of private equity-backed bonds, met a strong response from retail investors, although the subscription rate at 3.1 times was lower than previous issues.

Astrea VI received over S$784 million in valid applications at the offer's close on March 16 from a total of 25,511 applicants. The retail offer was S$250 million worth.

Margaret Lui, chief executive of Azalea Investment Management, said: "We are heartened by the strong support from retail investors and greatly appreciate the encouraging response and feedback."

She said Astrea PE bonds are investment grade and provide regular income and exposure to private equity at the same time. "Step by step, along with regular financial education programmes, Azalea hopes to be able to offer opportunities for retail investors to invest in the higher risk but higher returning classes of Astrea bonds, or equity-like securities in the future."

In 2019, Astrea V's Class A-1 bonds were 4.5 times subscribed and Astrea IV retail bonds were 7.4 times subscribed in 2018.

The retail offering of Class A-1 Bonds followed the successful placement of three classes of the bonds to institutional and accredited investors. These placements comprised S$132 million of Class A-1 Bonds; US$228 million of Class A-2 Bonds; and US$130 million of Class B Bonds.

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The total amount of valid subscriptions for all three classes of bonds including the placement and public offer was US$3.8 billion. This represents a subscription rate of 5.9 times the US$643 million of total bonds on offer.

The distribution of the bonds was diversified across a mix of institutions (48 per cent), accredited investors (23 per cent) and retail investors who took up the public offer (29 per cent).

The allocation of Class A-1 Bonds to 23,366 (92 per cent) out of 25,511 retail applicants reflects the issuer's desire to distribute the bonds to a broader retail investor base.

The Class A-1 bonds will be issued on March 18. Trading on SGX will begin on March 19.