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Temasek offers retail investors bonds with 3.85% annual interest rate

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A subsidiary of Temasek is offering retail investors private equity bonds that carry an annual interest rate of 3.85 per cent.

Called Astrea V, the bonds by The Azalea Group include Class A-1 bonds for retail investors totalling $180 million. It is scheduled to be redeemed at the end of five years, The Azalea Group said yesterday.

The rest of the $315 million A-1 bonds is a placement tranche marketed to institutions and accredited investors.

Retail investors can subscribe to the bonds from today to next Tuesday. They may do so through automated teller machines, with a minimum of $2,000.

Its launch comes on the back of the Astrea IV issue last year.

The Astrea V bond will be largely similar to the Astrea IV issue in terms of structure and features.

Astrea IV's $121 million retail offering was 7.4 times subscribed, with all 25,660 applicants receiving some allocation.

Private equity is an asset class typically accessible only to institutions or ultra wealthy private clients, owing to the high minimum investment required and a long lock-up period of up to 10 years.

Azalea chief executive officer Margaret Lui said the company was encouraged by the response to the Astrea IV issue and added there will be a "continued effort to make private equity more accessible to retail investors".

Astrea V plans to raise US$600 million (S$820 million) via three tranches, with each targeting a particular risk appetite.

Class A-2 bonds are expected to raise US$230 million while Class B bonds aim to raise US$140 million.

Both classes will be for accredited investors and institutions.

Astrea V is backed by a portfolio of 38 private equity funds invested in 862 companies.

The funds have a weighted average fund age of 5.4 years and are valued at about US$1.32 billion. - THE STRAITS TIMES