Temasek-backed PE firm Azalea issues PE bonds worth over $300m on SGX

Photo by Kit Suman on Unsplash

Astrea 7 Pte Ltd, an indirect wholly-owned subsidiary of the PE firm Azalea Investment Management, has issued its latest tranche of the Astrea 7 private equity retail bonds, which will be listed on the Singapore Exchange.

Azalea — a wholly-owned subsidiary of Seviora Holdings, which is in turn wholly-owned by Temasek — said in a statement that Astrea 7 was offering S$280 million ($202 million) of Class A‑1 bonds at a fixed interest rate of 4.125% per annum, as well as $100 million of Class B Bonds at a fixed interest rate of 6% per annum.

The public offer follows the successful placement of S$246 million of the Class A-1 bonds, $175 million of the Class A-2 bonds, and $100 million of the Class B bonds to institutional investors and accredited investors, which concluded on Thursday.

Its Class A-1 and Class A-2 bonds are available for a minimum subscription amount of S$2,000, and are expected to be rated “A+sf” by Fitch Ratings and “A+ (sf)” by S&P Global Ratings, while the Class B bonds — which rank junior to the Class A-1 and Class A-2 bonds — are expected to be rated BBB+sf by Fitch with a minimum subscription amount of $2,000.

The placement tranche saw a combined placement orderbook of $1.5 billion from 55 accounts, including insurance companies, asset managers, endowments, and foundations, which made up about 60% of the investor base.

This is the first time the Class B bonds are made available to retail investors in Singapore, according to Margaret Lui, CEO of Azalea. “Both Class A-1 Bonds and Class B Bonds offer retail investors an opportunity to invest in investment-grade bonds that provide private equity exposure and regular income,” she said.

The Astrea 7 private equity bonds are backed by cash flows from Azalea’s $1.9 billion portfolio of investments in 38 private equity funds from 29 managers.

“Astrea 7’s diversified portfolio provides exposure to 982 companies at launch across a broad range of industry sectors. Similar to previous Astrea transactions, there are several structural safeguards in place for Astrea 7,” added Chue En Yaw, chief investment officer of Azalea.

Besides the Astrea private equity bonds, Azalea Investment Management also manages other fund-of-fund products through its Altrium platform. Earlier this year, the firm closed its second Altrium fund at $805 million. Its first Altrium fund was closed at $650 million in 2019.

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