Linklaters advises on the first retail structured notes in Singapore

Linklaters advised Credit Suisse (Singapore) Limited, DBS Bank Ltd. and Standard Chartered Bank on the issuance by Astrea IV Pte. Ltd. of S$242,000,000 Class A-1 Secured Fixed Rate Bonds, US$210,000,000 Class A-2 Secured Fixed Rate Bonds and US$110,000,000 Class B Secured Fixed Rate Bonds. The Bonds are collateralised fund obligations which are backed by cashflows from interests in private equity funds owned by Astrea IV.

The Bonds are the latest offering from Azalea Asset Management, the fundraising platform backed by Temasek Holdings, which is focused on introducing new products to make private equity more accessible to Singapore investors. This is the first bond to be backed by private equity assets made available to retail in Singapore. Under the structure, the Class A-1 Secured Fixed Rate Bonds were sold to the retail public in Singapore as well as to sophisticated investors. The Class A-2 and Class B Bonds were sold to sophisticated investors in Singapore and offshore markets.

Jonathan Horan, Partner, Linklaters Singapore said:

“The deal was a great demonstration of our capabilities in structured finance and capacity to deliver on complex and innovative transactions. We are delighted to have supported Astrea and the managers on this ground-breaking fundraising.”

The Class A-1 Secured Fixed Rate Bonds and the Class A-2 Secured Fixed Rate Bonds benefit from certain credit enhancement features, such as (i) ranking senior to the Class B Secured Fixed Rate Bonds, (ii) reserve accounts which allow cash to build-up to repay principal and (iii) a maximum loan-to-value ratio of 50%. The Class A-1 Retail Bonds also benefit from a bonus redemption premium of 0.5% once a performance threshold is met.

The Linklaters team advising the managers was led by Jonathan Horan, Victor Wan, Sonia Lim and Daniel Yeo.