I wrote an article in 2019 when Astrea V was launched, I was not thrilled with PE bond offering such a low yield of 3.8% back then. But since the pandemic last year, the broad market interest rate has dropped to an even more ridiculous level. So PE-Backed Astrea Bond does appeal to some investors who are willing to take some risks nowadays.
Today, Azalea Asset Management, an indirect subsidiary of Temasek Holdings, is launching a new series of Astrea bonds backed by private equity (PE), Astrea VI Bond.
Do note that even if the Astrea bonds are “perceived” to be safe due to their association with Temasek, they are not without risks. You can take a look at the price performance of Astrea V below during a crisis last year.
I also talked about the risk of rising interest rates lately and you can see that even the US Treasury Bond prices can have a free fall when the interest rates start to climb.