The Class A-1 notes are rated A+/A+ (S&P/Fitch), while the Class A-2 notes are rated A by Fitch and the Class B notes at BBB+ by Fitch. The bonds have a 100bp step-up if the call is not exercised. The Class A-1 notes are split between a S$246mn institutional placement and a S$280mn retail tranche. The Class B note is split into a $100mn retail offer to Singapore-based investors and a $100mn institutional placement to Singapore-based and international investors. IFR notes that this is the first time that Astrea has opened its dollar bonds to retail investors. Azalea and Temasek have not provided any guarantees for the notes. There were more than S$640m ($461mn) of orders for Class A-1 notes, $540mn for Class A-2 notes and $510mn for the Class B notes. Insurers, asset managers, endowments and foundations made up about 60% of allocations, and the remaining 40% was allotted to accredited investors. This is the fourth time Temasek-owned Azalea is offering private equity bonds to retail investors.

Bankers note that the ABS transaction is backed by private equity funds and the deal is heavily collateralized  The ABS is secured against cash flows from a portfolio of 38 well-diversified PE funds with total NAV of $1.91bn at end-November 2021. Proceeds will be used to repay part of the loans used to acquire the fund investments.

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