Temasek subsidiary launches private equity bond for retail investors
The Azalea Group, a Temasek Holdings subsidiary, is launching a private equity bond with a tranche targeted at retail investors, a structure that is believed to be a world's first.
The group hopes to raise a total of about US$500 million (S$673 million) from the bond issuance.
The retail tranche of $242 million will be available for subscription through automated teller machines, for a minimum investment of $2,000.
The preliminary prospectus for Astrea IV was lodged yesterday on the Monetary Authority of Singapore's Opera site.
A roadshow for institutions is expected to begin today, which marks the start of a book-building process to ascertain demand and interest rates. The process may take one to two weeks.
Private equity is an asset class typically accessible only among institutions or ultra wealthy private clients. This is because the asset class, which offers exposure to private companies, is illiquid and the holding period could be as long as 10 years.
Astrea IV is backed by a diversified portfolio of 36 funds invested in more than 590 companies in a range of industries, including consumer, information technology and financials.
The funds have a weighted average vintage of 2011, and are valued at about US$1.09 billion.
Astrea IV will list three tranches, each designed to target a particular risk appetite.
The least risky tranche is Class A-1 retail bonds, which are expected to be rated Asf by Fitch - "sf" denotes the rating for structured finance.
Class A-2 bonds are expected to raise US$210 million, and Class B, US$110 million.
The scheduled maturity for Class A-1 and A-2 bonds is five years. This corresponds to their scheduled call date in 2023. Investors, however, will be free to sell their holding on the stock exchange. - THE STRAITS TIMES
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