Temasek-linked bonds get upgrade and affirmation by S&P Global Ratings

S&P GLOBAL Ratings has upgraded and affirmed its ratings assigned to a series of private equity (PE) bonds offered by Astrea IV and Astrea VI, Temasek-linked PE vehicles.

Astrea IV’s S$242 million Class A-1 notes are now rated “AA- (sf)“ from the previous “A+ (sf)“ grade. Meanwhile, Astrea VI’s S$382 million Class A-1 notes have been affirmed at “A+ (sf)“.

The “sf” suffix refers to a structured financial instrument.

S&P’s upgrade reflects its view that the reserves accounts balance is sufficient to fully redeem the Class A bonds on its scheduled call date Jun 14, 2023, said Azalea Asset Management, the issuer of the bonds, in a statement on Friday (Dec 23).

S&P also noted that the reserves will not be affected by the future performance of the underlying private equity funds.

Astrea IV was launched in June 2018 as the first listed retail PE bond in Singapore. The bond is backed by cash flows from 36 funds across various vintages managed by 27 general partners. The funds have been invested across 596 companies.

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Fitch Ratings in 2019 upgraded Astrea IV’s S$242 million Class A-1 notes to “A+(sf)“, from a previous rating of “A(sf)“.

Meanwhile, Astrea VI was launched in March 2021 and is the third listed retail bond in Singapore. The bond is backed by cash flows across 35 funds, managed by 28 general partners, and have been invested across 802 companies. The transaction portfolio has a weighted average fund life of 5.8 years and is mature and cash-generative.

The issuers of Astrea IV and Astrea VI are indirect wholly-owned subsidiaries of Azalea Asset Management, a wholly-owned unit of Temasek.