ASTREA VI, the latest series of private equity-backed bonds, has been tokenised by digital platform iSTOX, reducing the minimum investment ticket by up to 10 times for accredited investors.

The US-denominated tranches of Astrea VI - Class A-2 and Class B bonds - were fully taken up in a placement exercise earlier this month. It was open to institutional and accredited investors for a minimum investment of US$50,000 for Class A-2 bonds and US$200,000 for Class B bonds.

Through iSTOX, accredited investors can invest in Class A-2 and B security tokens for a minimum of US$20,000.

Astrea VI is part of a programme of issuance by Azalea Asset Management, an indirect subsidiary of Temasek Holdings. Class A-2 bonds carry an annual interest rate of 3.25 per cent, and Class B bonds, 4.35 per cent.

According to iSTOX, the speed of the blockchain network reduces transaction costs and allows trades to be settled instantly, instead of the usual two working days with traditional exchanges.

Oi Yee Choo, iSTOX chief commercial officer, said the platform believes in democratising the private markets to help spread the benefits of asset classes such as private equity more widely among smaller investors. "Since 2018, Azalea has offered Astrea Class A-1 private-equity bonds to retail investors. With this latest digital token issuance, iSTOX further levels the playing field by lowering the minimum investment significantly, putting these tokens within the reach of many accredited investors - hundreds of thousands in Singapore and tens of millions worldwide."

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She said digital tokens are transforming financial markets "in a profound way". "The technology is fundamentally more efficient. Over time as issuers and investors become better acquainted with digital tokens, we expect market forces to shift much, if not all, of the global bond market to digital issuances."

iSTOX is regulated by the Monetary Authority of Singapore as a multi-asset digital securities platform for the issuance, custody and secondary trading of private market products such as hedge funds, wholesale bonds and private equity. The platform is backed by the Singapore Exchange, Temasek subsidiary Heliconia Capital and JIC Venture Growth Investments. 

Individual accredited investors using the iSTOX platform come from 24 countries, spanning Asia, Europe, the Americas (excluding the US), Australia and New Zealand.