Temasek's Azalea launches Astrea 7 PE-backed bonds; interest rates to be decided

AZALEA Asset Management, an indirect subsidiary of Temasek Holdings, is launching a new series of bonds back by 38 private equity (PE) funds.

The indicative total size of the new issuance – called Astrea 7 – is US$755 million. It is around 39.6 per cent of the underlying PE portfolio valued at US$1.9 billion.

The issuance will have 3 classes of bonds, A-1, A-2 and B, but only Class A-1 and Class B bonds will be made available to retail investors, according to a preliminary prospectus lodged on Friday (May 6) at the Monetary Authority of Singapore's Opera site.

The indicative size of the lowest risk tranche of Class A-1 bonds is US$335 million or S$462 million, comprising S$277 million for the public offer and a placement of another S$185 million to institutions and other investors.

The indicative size of the Class A-2 bonds is US$220 million. Like previous issues, there is a mandatory call after 5 years in 2027 and legal maturity of 10 years in 2032 for the Class A-1 and A-2 bonds.

The issuance of the Class B bonds, which rank junior to the Class A-1 and A-2 bonds in terms of payment priority, has an indicative size of US$200 million. Half of this amount will be offered to the public while the remaining half will be for institutions and other investors, offered through a placement.

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The Class B bonds have a scheduled call date after 6 years in May 2028 and will mature 10 years from now in May 2032.

Based on the tentative timeline in the prospectus, the issue will open for applications on May 19 at 9 am and close at noon on May 25. The minimum application for retail is S$2,000.

Trading on the Singapore Exchange will start on May 30 at 9 am.