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New Astrea 7 structured finance bonds available for retail investors

Goola Warden
Goola Warden5/19/2022 03:46 PM GMT+08  • 4 min read
New Astrea 7 structured finance bonds available for retail investors
Astrea 7 Class A-1 and Class B bonds to be offered to retail investors at 4.125% and 6%.
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Astrea 7, which resitered its prospectus on May 19, offers 3 classes of PE Bonds, Classes A-1, A-2 and B, backed by cash flows from a diversified portfolio of PE funds. It is offering $280 million of Class A-1 Bonds and US$100 million ($138 million) of Class B Bonds to retail investors in Singapore. The quantum is subject to change because Astrea 7’s prospectus is preliminary.

Class A-1 and B bonds are priced at 4.125% and 6% respectively. Cash flows from a US$1.9 billion portfolio of 38 PE Funds will be used to pay bond principal and interest. The cash from this portfolio will be disbursed when the 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. The portfolio recorded a profit for the initial period ended Nov 30 last year and received net cash distributions of around US$80 million.

Class A-1 bonds are denominated in Singapore dollars while Class B bonds are denominated in US dollars. Both Class A-1 bonds and Class B bonds are expected to have investment-grade credit ratings. The Class A-1 Bonds rank senior to the Class B bonds and pari passu with the Class A-2 bonds (which is for institutional investors). This means that Class B bonds have a relatively higher credit risk profile as compared to the Class A-1 bonds and will be paid after Class A bonds.

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