Investors Weigh the Risks

Mr Lim Jun Jie, director of investor solutions and marketing at Azalea Investment Management, said that holders of the US dollar-denominated tranche of Class A-2 bonds face exchange rate risks as the coupons and principal amount are paid out in US dollars.

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The bonds are held in the Central Depository and any cash distributions in US dollars are by default converted into Singdollars at the prevailing exchange rates.

Retail investors who wish to hold on to their cash in US dollars will have to opt out of this currency conversion service, Mr Lim noted.

A first-time retail investor in Astrea who preferred to be known only as Ms Kim decided to dip her toes into Astrea 9 with around $20,000 to $30,000 for the Singapore-dollar tranche.

The 54-year-old was sceptical at first, but after attending the seminar said she felt reassured that her investments would be relatively safe.

"Azalea is a subsidiary of Temasek," she said, adding that she has confidence in the investment company.

Mr Chue En Yaw, chief executive and chief investment officer of Azalea Investment Management, clarified that Astrea PE bonds are "not guaranteed by anybody, including Temasek".

Mr Goh added that Azalea has a track record of redeeming its bonds so far.