Azalea Asset Management has just released the Astrea VI private equity bonds for application on 10th March 2021. This time round, Astrea VI bonds is offering 3.00% per annum returns. This is lower than what was offered by Astrea V bonds in 2015 that offered 3.85% per annum returns.
Back then, my wife was only allocated 50% of Astrea V bonds when she applied for it which was 4.5 times oversubscribed.
Depending on demand, Astrea VI plans to allocate valid applications as follows:
- All applications of less than S$50,000 will be allocated in full or in part;
- Applications of S$50,000 or more will be balloted, with successful applicants allocated in full or in part.
Astrea VI Transaction Portfolio is diversified across 35 Private Equity Funds, managed by 28 GPs and invested across 802 Investee Companies. The Transaction Portfolio has a weighted average fund life of 5.8 years, and is mature and cash generative.
As you can see below, the portfolio net asset value is overweight in the U.S market at 61%. EU and Asia makes up 23% and 16% respectively.
This time round, Astrea VI is offering three classes of bonds: Class A-1, Class A-2 and Class B. Below are the differences.
Only Class A-1 bonds are offered to retail investors in Singapore (Stock Code: 6AZB). Class A-1 bonds have a fixed interest of 3.00% per annum payable every six months. There is a 1.0% p.a. one-time interest rate step-up if bond is not redeemed after 5 years.
Class A-1 bond holders will get an additional 0.5% of their bond principal at redemption if the Sponsor, Astrea Capital VI, receives US$421 million (50% of Issuer’s equity) by 18 March 2026.
Class A-2 and Class B
Class A-2 and Class B bonds are not offered to retail investors which means you are not able to subscribe for them. These classes of bonds are only offered to certain institutional or accredited investors in Singapore and elsewhere outside the United States.
Class A-2 bonds have a fixed interest of 3.25% per annum payable every six months with a 1.0% p.a. one-time interest rate step-up if bond is not redeemed after 5 years.
Class B bonds have a fixed interest of 4.35% per annum payable every six months.
How to Apply
The Class A-1 Bonds under the Public Offer will be open for application from 9.00am on 10 March 2021 and close on 16 March 2021, 12.00pm.
You may apply using one of the following manner:
- ATMs of DBS (including POSB), OCBC and UOB
- Internet banking websites of DBS (including POSB), OCBC and UOB
- Mobile banking application of DBS and UOB
At 3.00% per annum returns, this is deemed as attractive to me since interest rates of fixed deposits have fallen to as low as 0.45% per annum. The returns in fact beats Singlife, Dash EasyEarn and Dash PET which offers return of 1.5%, 2.0% and 1.7% per annum respectively.
As all investments carry certain form of risks, it is important you read through the FAQ prior to subscribing for Astrea VI bonds.
As there are stocks that I am currently accumulating monthly, I am giving Astrea VI a miss since I will like to conserve cash for my stock purchases.