Azalea launches latest series of private equity-backed bonds for retail investors

Azalea Asset Management has launched for public subscription its latest issue of private equity-backed bonds – Astrea 8.

The issue is set to attract a strong response, thanks to the investing public’s keen appetite for yield and a macro environment where interest rates have likely peaked and may soften later in 2024.

The Astrea 8 bonds comprise $260 million worth of Class A-1 bonds in Singapore dollars that will carry a fixed coupon of 4.35 per cent, and US$50 million (S$67.4 million) worth of Class A-2 bonds in US dollars with a fixed coupon of 6.35 per cent.

Azalea is part of the Temasek group and manages around US$9 billion in assets.

The public offer follows the successful placement of $260 million of Class A-1 bonds and US$150 million of Class A-2 bonds for institutional and accredited investors on July 10.

The placement tranche saw strong demand from institutions, including endowments, pensions, insurance companies and asset managers, with a combined placement order book in excess of $1.2 billion. This is equivalent to a subscription rate of 2.6 times.

Fitch has issued a tentative A+ rating for the Class A-1 bonds, and A for the Class A-2 bonds.

The minimum subscription for Class A-1 bonds is $2,000, and for Class A-2 bonds, it is US$2,000. For subscribers for the Class A-2 bonds, the exchange rate is fixed at US$1 to S$1.35.