Astrea IV Class A-1 bonds rise to 102.9 on debut

TEMASEK-LINKED Astrea IV's Class A-1 bonds has risen to 102.9 on its first trading day.

At 10.39am, the private equity-backed bonds traded at 102.9 per cent of par, translating to a yield of 3.707 per cent.  The bonds opened at 102.1 on Monday.

The S$121 million retail offering of the bonds, which were issued by Temasek Holdings' subsidiary, Azalea Group, were 7.4 times subscribed.

iFast's bond specialist, Ang Chung Yuh said: "It is unsurprising that the market has reacted so positively on the first day of trading for Astrea IV's bonds.  There has been a lack of options in the retail bond market and Astrea IV has the support of multiple positive media reports partly due to its Temasek linkage."

But Mr Ang cautioned against over-reacting to the Temasek connection.  "It is important to take note that these bonds are not backed by Temasek.  Instead, the underlying investment portfolio has more direct bearing on the yield of the bonds."

Astrea IV PE (private equity) bonds are backed by cash flows from a portfolio of investments in 36 underlying PE funds.  These funds have a net asset value of US$1.1 billion and are invested in 596 investee companies globally across multiple sectors.