Azalea’s Astrea 7 PE bonds overall 3 times subscribed at over US$2b

The latest batch of Astrea private equity (PE) bonds, launched by Temasek-backed Azalea Asset Management, was overall 3 times subscribed.

Total subscription received for all 3 classes of Astrea 7 PE bonds – Class A-1, Class A-2 and Class B – was over US$2 billion, compared with the US$755 million of bonds offered in total, Azalea said on Thursday (May 26).

For the retail offerings, the issuer had received S$877 million from 30,565 valid applicants for the Class A-1 bonds - which pay a fixed interest rate of 4.125 per cent per annum - representing a subscription rate of 3.1 times the offer of S$280 million.

More than 75 per cent of the bonds were allocated to all valid applications of less than S$50,000, while valid applicants who applied for S$50,000 or more were balloted. Some of 92 per cent of valid applicants received allocations.

Meanwhile, the issuer received US$126 million from 7,059 valid applicants under the retail offer for the Class B bonds - which pay a fixed interest rate of 6 per cent per annum - representing 1.3 times the offer of US$100 million.

Some 73 per cent of the bonds were allocated to all valid applications of less than US$50,000, with all valid applicants allocated in full or in part.

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Azalea said the distribution of the bonds under the placement tranches was diversified across high-quality institutions, including insurance companies, asset managers, endowments and foundations, as well as accredited investors.

Azalea chief executive Margaret Lui said, “Given the current market volatility, we are pleased to see investors’ recognition of the quality of the Astrea 7 PE bonds.”

“Azalea will be guided by investors’ demand and feedback to develop and introduce more innovative products and solutions to deepen investors’ exposure to private equity in the future,” she added.

Astrea 7, which was the largest offering of retail PE bonds in Singapore to date, was also the first time retail investors could access 2 classes of investment grade bonds.

DBS global head of fixed income Clifford Lee said the strong interest by retail investors was a “testament to the growing popularity of investment-grade PE-backed bonds to provide private equity exposure and regular income”.

Lee also said this “bodes well for the development of Singapore’s retail bond market”, noting that the Class B bonds are the first US-dollar denominated investment grade bonds for retail investors in Singapore.

The Astrea 7 Class A-1 and Class B bonds will be issued on May 27 and will commence trading on the Singapore Exchange (SGX) on May 30.

Applicants who did not receive their allocation will have their respective balances refunded by 6 pm on May 27. Once trading starts, investors may also buy or sell the bonds over the SGX, at the prevailing market price.