Vertex Venture Holdings, a Singapore-based venture capital firm backed by Temasek, is raising S$450 million (about $330 million) through the issuance of seven-year senior unsecured Singapore dollar bonds at a coupon rate of 3.3%, according to a company announcement.
The issuance is part of the firm’s maiden $2-billion Multicurrency Debt Issuance Programme. Vertex said the issuance, the first SGD corporate bond issuance by a global VC firm, was upsized due to the “overwhelming investor demand”.
“The seven-year Singapore dollar bond at a coupon rate of 3.3 per cent drew significant interest from high-quality institutional investors and private banks,” Vertex said.
The bonds are expected to be issued on 28 July 2021, subject to the fulfillment of customary closing conditions.
The firm said it will use the proceeds of the issuance to fund investments, refinance existing borrowings, redeem any redeemable preference shares in the share capital of the company, general working capital, and general corporate purposes.
This is the first time Vertex, which has assets under management in excess of $4.5 billion, is publicly issuing bonds.
“We decided to issue this corporate bond not just to diversify and extend our sources of funding as part of our transformational journey, but also to sensitise investors who have hitherto not been exposed to venture capital to this asset class,” said Vertex Holdings chairman Teo Ming Kian.
Aside from diversifying Vertex’s sources of long-term capital, the issuance also offers fixed income investors exposure to the venture capital industry not previously seen in the SGD bond market, the firm said.
“Bringing in new stakeholders beyond founders and established venture capital investors will help strengthen our innovation and enterprise ecosystem,” Teo added.
Vertex has an active portfolio of over 200 firms in technology and healthcare across key global innovation hubs. funds. It is a wholly-owned subsidiary of Temasek Holdings
The latest development comes as Vertex Growth Fund, the growth stage-focused vehicle under Vertex Holdings, is expected to hit the first close of its $330-million second fund this month, DealStreetAsia reported earlier. The fund has a hard cap – or maximum size – of $400 million.
Vertex Growth had secured Korea Venture Investment Corporation (KVIC) as an LP in Vertex Growth Fund II. The South Korean government-backed fund-of-funds has approved a commitment of $15 million to the Vertex vehicle, according to a disclosure.
In 2014, Vertex invested in Southeast Asia’s Grab, then known as GrabTaxi – the first institutional investor to do so.