Temasek issues bonds backed by PE fund interests

Astrea Capital, a subsidiary of Temasek-owned Azalea Asset Management, issued the bonds through its vehicle Astrea III. The funds on which the bonds are based are valued together at $1.14 billion, and are managed by 26 GPs including Blackstone Group, KKR, TPG Capital and Warburg Pincus.

Astrea plans to market the bonds to non-US institutional and high net-worth individuals; the bonds will be listed in Singapore. In a statement, Fitch ratings reported that the bonds would fall into categories, with $234 million in Class A-1 notes, $170 million in Class A-2 notes - both with an expected rating of A - and $100 million in Class B notes - with an expected rating of BBB.

Fitch noted that as Astrea holds the entire equity stake in Astrea III and will do so for the duration of the bond issue, its interests are strongly aligned with potential investors. Further, Astrea's motivation includes non-financial factors such as contributing to the development of PE-backed investment products in Singapore.

Temasek has previously sought to broaden its PE portfolio to allow participation by a wider range of investors. In 2014 the firm launched a co-investment vehicle, Astrea II, allowing six outside institutional investors exposure to its PE fund portfolio. That vehicle followed a similar fund, Astra I, launched in 2006.

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• Topics
• Southeast Asia
• Financials
• GPs
• Singapore
• Temasek Holdings