IPO Chilli Ratings

IPO Chilli Ratings
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Astrea VI Class A-1 Bonds - Balloting Results

Astrea VI announced that its retail bond offering of S$250m was 3.1x subscribed and the overall issuance including the placement tranche was 5.9x subscribed. 

Considering that the issuance size this time is much larger at $250m (versus $180m in Astrea V) and the interest rate is much lower at 3% (versus 3.85% in Astrea V), I would consider this as a very good outcome and our retail investors definitely know a "safe" deal when they see one. 😂  

The Issuer continue to allocate more than 3/4 of the issuance to small investors (defined as those who applied for less than $50,000) and stuck to its promise to ballot for those who applied for $50,000 or more. 

The balloting table is presented below:

There is an interesting quote by Azalea's CEO, Ms Margaret Lui :

"Private equity funds and related investment products are typically not accessible to retail
investors. The Astrea PE Bonds are investment grade bonds which provide regular income and exposure to private equity at the same time. It gives retail investors an opportunity to invest for their future. Step by step, along with regular financial education programmes, Azalea hopes to be able to offer opportunities for retail investors to invest in the higher risk but higher returning classes of Astrea bonds or equity-like securities in the future."

While I applaud the clear direction, especially the "equity-like" securities, I personally think the messaging is more for others, such as:
  • CPF - If I can't even use CPF to invest in the Class A-1 Bonds, don't even need to talk about Class A-2 or B. Frankly CPF monies are very suited for private equity but "toot" bad, you can't use it
  • Regulators - Currently retail investors can't even touch Class B or be offered any private equity products, the idea of offering equity products to retail is frankly "far-fetched". We will need a radical change in how local regulators view PE for this asset class to be offered to accredited mass affluent investors (not even mentioning retail investors).  
  • SGX - In any case, Azalea will find listing its shares or offering the equity tranche in Astreas challenging as investors here don't really know how to appreciate or evaluate such private equity companies. Just look at the poor performance of "listed PE firms" such as Hotung and Trendlines on SGX

My take - Don't hold your breathe for this. It will be a long shot until I see Class A-2 or Class B being offered for the IPO . . .   


Anonymous said…
Trading tomorrow at 9am?
What do you think will be the trading price range when it debuts?