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● launched in May 2022? Well, here’s some good news. Astrea 8 Pte. Ltd. and Pte. Ltd. have announced the launch of the newest tranche of Astrea PE bonds: the on the : This time around, Azaela will open  only the fifth private equity retail bonds to be listed on the . They will    of The Public Offer million of the Class A-2 Bonds to Accredited Investors (AI) and Institutional Investors. Intrigued? Here is what you need to know about the Astrea 8 PE Bonds!. Here are a few things to take note of: It is important to note that the issuer of the Astrea 8 PE Bonds is , an indirect wholly-owned subsidiary of . The Azalea Group invests in private equity funds, focusing on developing and innovating new investment platforms and products to make private equity accessible to a broader group of investors. One such innovation is the Astrea Platform, a series of investment products based on diversified portfolios of PE funds. It represents a phased approach to developing products for long-term-minded Singapore retail investors to co-invest in private equity with Azalea. Started in 2006, there are seven in the series to date, with Astrea 8 being the latest addition to the Astrea Platform. In essence,  . You act like a “lender”, and the company or government acts as a “borrower”. Bonds are another form of investment option, just like . Bonds are commonly referred to as fixed-income securities. They work by paying back a regular amount, also known as the coupon rate, in return for the risk lenders take on. Effectively, bonds are backed up by the issuing entity. In contrast, the new Astrea 8 PE Bonds are backed by cash flows from a diversified portfolio of 38 PE Fund Investments. As of 31 December 202, the funds are invested in 1,028 companies spanning different regions, time periods, and sectors. The total Net Asset Value (NAV) of the portfolio stands at US$1,471.4 million. Also, here is more information about the Bonds: Total portfolio Net Asset Value (“NAV”) is US$1,471.4 million Fund Strategy: 76.4% Buyout, 23.6% Growth Equity Fund Region: 63% U.S., 20% Europe, 17% Asia Range of Vintage Years: 2015 – 2020 Weighted average age by NAV: 6.1 years Top Three Fund Investments Insight Venture Partners (Cayman) X, L.P. Thoma Bravo Fund XIII-A, L.P. CVC Capital Partners VII A L.P. Top Three GPs Insight Partners Permira Silver Lake. Astrea 8 will receive cash from its Transaction Portfolio of PE Funds when its underlying investments are sold. These cash inflows are then used according to the Priority of Payments to pay for its expenses, interest payments to bondholders and principal repayments. These Astrea 8 PE funds are also diversified across Geography and sectors, with the top five sector groups at the investee company level in: However, one thing to note is that the amount of risk you take with the Astrea 8 PE Bonds is nothing to sniff at, as private equity funds often expect their companies to provide a 20% – 30% internal rate of return. Also, private equity funds traditionally acquire their underlying companies with buyouts. This is something to take note of. That’s not all. For more insight, let’s examine both the Class A-1 and Class A-2 Astrea Bonds further. Note that both Class A-1 Astrea 8 Bonds and Class A-2 Astrea 8 Bonds are ranked equally ( ) in terms of priority of payment. This means that both bonds are investment grade, but the Class A-1 bonds are less risky. In addition, here is how the different classes of bonds differ: The Class A-1 bonds have an interest rate of a semi-annual interest payment, and a Mandatory Call scheduled for July 2029, contingent upon meeting specific conditions. If these bonds are not called, the coupon rates will increase by 1.0% per annum just once. For the mandatory call to proceed, sufficient funds must be available in the Reserves Account and Reserve Custody Account to redeem the bonds, and there must be no outstanding loans from the Credit Facility. Pending certain conditions, the Class A-2 bonds have an interest rate of a semi-annual interest payment and are scheduled for a Mandatory Call in July 2030. If these bonds are not called, the coupon rates will increase by 1.0% per annum just once. For the mandatory call to be exercised, all Class A-1 bonds must be fully redeemed, in addition to meeting the same conditions required for the redemption of Class A-1 bonds. Astrea Bonds have consistently demonstrated a dependable history of meeting redemption obligations: These reserve accounts are mandated to hold cash to ensure enough reserves are available to redeem the bonds on the call date. This means that both bonds are investment grade, but the Class A-1 bonds are less risky. You can read more about the Astrea 8 bonds Fitch rating Here are some of the risks of the Astrea 8 Bond you should be aware of: Applications for the Astrea 8 Bonds for the public open tomorrow, 11 July 2024 at 9am via DBS/POSB, OCBC and UOB ATMs, mobile banking and internet banking websites: