Temasek unit launches Singapore's first listed private equity bonds

The US$510 million issue, sponsored by Temasek Holdings' Azalea Asset Management, will offer four classes of bonds based on interest rates and risk profiles.
The US$510 million issue, sponsored by Temasek Holdings' Azalea Asset Management, will offer four classes of bonds based on interest rates and risk profiles.PHOTO: ST FILE

SINGAPORE - Astrea III, Singapore's first listed private equity bonds, were priced and launched overnight.

The US$510-million issue, sponsored by Temasek Holdings' Azalea Asset Management, will offer four classes of bonds based on interest rates and risk profiles.

The A-1 bonds will have a yield of 3.9 per cent a year, and A-2 bonds will yield 4.65 per cent. The class B bonds' yield will be 6.5 per cent, followed by class C's 9.25 per cent.

A-1 bonds have been designated as an investment grade product and can potentially become available for retail investors, Azalea said on Wednesday (June 22), adding that A-2 and B are also expected to be rated investment grade. Class C bonds are not rated.

Astrea III are currently only available for institutional and accredited investors. Fullerton Fund Management, another Temasek unit, will manage Astrea III.

The bonds were subscribed more than eight times, with one third of the issue allocated to individual investors.

Azalea chief executive Margaret Lui said: "Traditionally, private equity is an asset class only available to a selected group of investors with significant capital to invest over the long term. Azalea is proud to be the first in Singapore to make private equity more accessible to the wider investment community through a PE bond structure.

"Astrea III is a step towards achieving our vision of broadening the co-investor base for our diversified portfolios of private equity funds. We are actively exploring suitable opportunities for retail investors to participate in private equity-based products in the future."

First revealed earlier this month, Astrea III are built on a portfolio of 34 PE funds managed by 26 established fund managers. They combine to give an exposure to over 590 companies across Asia, Europe and the United States.