Ratings agency Fitch Ratings has upgraded the private equity (PE) backed Astrea VI Class A-2 bonds, part of a few tranches of Astrea bonds that were in high demand when launched.
The bonds, which are denominated in US dollars, have been upgraded from “Asf” to “A+sf”, issuer Azalea 8 said in a statement on Tuesday (Dec 10).
“The upgrade for Astrea VI Class A-2 bonds from ‘Asf’ to ‘A+sf’ by Fitch reflects the expectation that at their loan-to-value level, the bonds can withstand significant decline in their transaction net asset values (NAVs) while still passing Fitch’s ratings requirement at the ‘Asf’ level,” the statement said.
Astrea PE bonds have seen strong demand, with the latest tranche launched in July being 2.8 times subscribed. The total subscription received for the public offers of both classes of Astrea 8 PE bonds, Class A-1 and Class A-2, was over S$1 billion. This was more than three times the S$260 million and US$50 million of bonds offered.
Investors included endowments, pensions, insurance companies and asset managers, said Azalea. There are other Astrea bonds denominated in Singapore dollars, which are bonds collateralised by a portfolio of PE funds.
Azalea is part of the Temasek group, and manages around US$9 billion in assets.
In a separate statement on Dec 9, Fitch said: “Fitch believes Astrea VI’s liquidity position is strong, which should allow it to continue meeting capital calls, expenses, and interest, even if distributions were to decline.”
“To date, Astrea VI’s underlying fund investments have performed well, and significantly better than Fitch’s stress scenarios,” Fitch added.
