Astrea V PE bondholders to receive semi-annual interest payments of up to 5.75% per annum

THE holders of Astrea V private equity (PE) bonds will receive semi-annual interest payments ranging from 3.85 per cent to 5.75 per cent per annum in the latest distribution, said Azalea Investment Management. It added that Class A bonds have been fully reserved a year ahead of schedule.

A report by Azalea published on Tuesday (Jun 20) on its eighth semi-annual distribution said holders of Class A-1 bonds would receive 3.85 per cent per annum in semi-annual interest, while those holding Class A-2 would receive 4.5 per cent per annum and Class B, 5.75 per cent per annum.

Astrea private equity bonds are asset-backed securities backed by cash flows from PE Funds invested by Azalea. The company is a wholly-owned subsidiary of Seviora, and indirectly owned by Temasek.

The issuer stated that US$3 million had been reserved for Class A bonds from December 2022 to June, with this class of bonds having been fully reserved a year ahead of schedule.

During this distribution period, US$98 million of distributions were received from the PE funds while US$10 million was invested through capital calls.

The net distributions of US$88 million were applied to the priority of payments.

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The priority of payments requires certain payments to be made to the reserves accounts over a period of time, in order to enable the issuer to build up sufficient reserves up to the reserves accounts cap for the redemption of all Class A-1 and Class A-2 bonds on the scheduled call date.

These cash flow and unrealised fair value movements resulted in an ending portfolio net asset value of about US$1 billion.

As the performance threshold was met as at December 2021, a bonus redemption premium of 0.5 per cent will be paid to Class A-1 bondholders upon redemption.

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Class A-1 PE bonds issued by Astrea IV were fully redeemed a week ago, five years from their issue date in 2018.

Known as the Astrea IV PE bonds, the Class A-1 bonds had a fixed interest rate of 4.35 per cent per annum, paid every six months. The issue size was S$242 million.

Bondholders who subscribed to the 2018 tranche also received a bonus 0.5 per cent redemption premium on the principal amount, as the performance threshold was met before the time of redemption.