The much talked-about Astrea bond is back with its ninth instalment (sixth offering that is available to Singapore retail investors).
And with a track record of fulfilling its bond obligations, scepticism has eased, and Astrea PE bonds have slowly grown to be recognised as one of the investment vehicles that generate passive and safe returns.
Before deciding whether to subscribe, here are some key details you should know.
Basic mechanics recap
There are plenty of situations where seasoned but retail investors, like myself, can only look on with envy as PE firms rake in cash when companies they have invested in goes public. Investing in the modern age has taken a new shape, where chasing crazy returns has led individuals and firms to fund and back the next great big company.
That was until a clever solution was devised: wrap PE investments into a bond, significantly lowering the risk of an investment going bust.
It solved two pain points – providing PE exposure while limiting the downside risks or the need for even more capital raising exercises.
Portfolio summary
Just like previous instalments, Astrea 9 PE bonds will be backed by cash flows from a quality diversified portfolio of 40 Private Equity funds managed by 31 reputable general partners.
As of the cutoff date of 31 December 2024, these funds have invested in 1,086 companies across various regions, vintages and sectors.
The total portfolio Net Asset Value (NAV) is US$1.625 billion. Strategy wise, it employs a breakdown of 82.9% buyout and 17.1% growth equity. Geographical wise, 65.9% of it is in the U.S., 26.5% in Europe and the balance 7.6% in Asia.
The top 3 fund investments include Warburg Pincus Global Growth, L.P., Triton Fund V L.P. and TPG Partners VIII, L.P. Sector breakdown wise, 31.1% is in information technology, 20.6% in industrials, 15.4% in healthcare, 8.2% in financials and 7.9% in consumer discretionary.
Offer details
There are 3 different classes of Astrea 9 PE bonds, namely the Class A-1 Bonds, Class A-2 Bonds and Class B Payment-In-Kind (PIK) Bonds. Only the Class A-1 and Class A-2 bonds are offered to retail investors in Singapore.
Both the Class A-1 and Class A-2 are ranked equally (pari passu) in terms of priority of payment, and are expected to be rated investment grade by Fitch. They will be listed on the Mainboard of the SGX-ST.
The call in (redemption) is scheduled to be in 5-years time, on 8 August 2030 mandatorily, with a final maturity of 15 years. And if there are insufficient reserves for full redemption on the scheduled call date, there will be a one-time 1.0% per annum step-up in their interest rates, to 4.4% per annum and 6.7% per annum, respectively.
The bond is not capital protected, therefore there is risk to this investment.
However, structural safeguards are put in place to enable timely payment of bond interests and principal repayment. If the portfolio experiences a cash shortfall, it may utilise the credit facility it has with OCBC to cover various expenses, payables, and capital calls. However, distributions to bondholders and equity investors can only proceed once any outstanding drawdowns on this facility have been fully repaid. Management has indicated that the credit facility has been designed to support expenses and capital calls for a period of 2 to 3 years. Additionally, they mentioned that, so far, none of their portfolios have needed to access their respective credit facilities.
Interest rates and Verdict
The interest rates for the Class A-1 and A-2 bonds will be 3.4% and 5.7% respectively.
While the interest rates are lower compared to Astrea 8 (which we’ve previously covered), with interest rates slated to be lowered in the next 1 to 2 years, then this round, especially the USD denominated bonds, look like a steal.
Some investors might ask: Is 3.4% and 5.7% considered high? Yes, in the realm of fixed income investments, but okay-ish when compared with dividend stocks.
If you are an equity approach investor, even an upfront 6.0% interest rate per annum might not excite you. Conversely, for the risk-averse group of investors, I would think the Astrea 9 has a very strong selling point.
It also caters to investors who deploy a barbell strategy approach – a mixed of equities and bonds. So I would see it catering to quite a large group of people.
My guess is that it would be oversubscribed, so good luck for those who are planning to submit their applications!
How to apply for Astrea 9 Bonds?
You can apply via ATM, Internet banking, or mobile banking of DBS (including POSB), OCBC and UOB.
The Class A-1 Bonds have a minimum subscription amount of S$2,000, while the Class A-2 Bonds have a minimum subscription amount of US$2,000. Subscribers to the Class A-2 Public Offer, which is US dollar-denominated, will pay in SGD at the fixed US-dollar exchange rate of US$1.00 to S$1.2852.
Key application details to note:
- Application start date: Thursday 31 July 2025, 9am
- Application close date: Wednesday 6 August 2025, 12pm
- Bond issue date: Friday 8 August 2025
- Bond trading date: Monday 11 August 2025 on SGX-ST
For more information, you can take a look at the prospectus here. There is also a hotline to call for queries at the following banks:
- DBS Bank: 1800 111 1111
- POSB: 1800 339 6666
- OCBC: 1800 363 3333
- UOB: 1800 222 2121
There is a non-refundable administrative fee of S$2 paid by the applicant for each application.
Please also ensure that you submit only one valid application for a class of Bonds under its public offer. This means that you can apply once each for Class A-1 Bonds and Class A-2 Bonds.
How much can I be allocated?
Depending on demand, Astrea 9 plans to allocate valid applications as follows:
a) all applications of S$50,000 or less for Class A-1 Bonds or US$50,000 or less for Class A-2 Bonds will be allocated in full or in part; and
b) applications of more than S$50,000 for Class A-1 Bonds or more than US$50,000 for Class A-2 Bonds will be balloted, with successful applicants allocated in full or in part.
This means that if you want to be guaranteed an allocation, your application needs to be $50,000 or less in the respective currencies.
Good luck!
