Temasek-linked Astrea V aims to raise $827m via bond issue

Yield-hungry retail investors can look forward to a new bond issue by Temasek-linked private equity vehicle Astrea V.

The public offer tranche is expected to be larger than the $121 million from Astrea IV last year.

Its preliminary prospectus lodged yesterday noted that the bond to be issued by Astrea V will be largely similar to Astrea IV's 2018 issue in terms of structure and features.

Details such as the coupon rates of the bond are expected soon. But the 4.35 per cent to 6.75 per cent coupon rates of Astrea IV's 2018 issue could be instructive for Astrea V's.

The latest issue plans to raise US$600 million (S$827 million) via three tranches, each designed to target a particular risk appetite.

The least risky tranche is the Class A-1 offering amounting to $315 million and scheduled to be redeemed at the end of five years. A portion will be offered to retail investors for subscription with a minimum investment of $2,000.

The exact amount available for retail subscription has not been determined, and will depend on the response during the book-building process, but it is expected to exceed Astrea IV's $121 million.

Class A-2 bonds are expected to raise US$230 million - also scheduled to be redeemed at the end of the fifth year, while Class B aims to raise US$140 million. Both classes will be available to only accredited investors and institutions.

The new issue will have structural safeguards in place, including a reserve account that builds up cash to redeem the tranches.

The underlying portfolio is valued at US$1.3 billion and is invested in 38 funds managed by 32 private equity managers, giving exposure to about 860 companies in various industries, including IT, consumer discretionary, financials, industrials, healthcare and communication services.

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A version of this article appeared in the print edition of The Straits Times on May 23, 2019, with the headline Temasek-linked Astrea V aims to raise $827m via bond issue. Subscribe