Thanks then going by above there is a risk of capital loss (due to forex exchange) even for class A if it is redeemed at maturity date. Noted.
You have asked some leading questions and taken my answers to be what you want them to be. Alright then
Not true. Class A1 will not have capital loss at redemption because it is denominated in SGD.
Eg I am alloted SGD15,000. At redemption I get back SGD 15,000.
No, what he is saying is that despite all of Astrea's protections such as reserve accounts, they do not call the class A bonds in 5 years' time and pay higher interest and only redeem upon maturity,
and there is USD currency risk because there is no hedging for them.
Which is not exactly true. Class A bonds are
SGD bonds. They have to pay the interest in SGD. Likewise for maturity - Astrea cannot say, well we have no more hedging and now your bond is only worth SGD999, take it or leave it. That is tantamount to defaulting.
Don't come up with this peculiar scenario and say this is possible, oh no, what about this risk.
Another point is that if they do not call in 5 years' time, it means the underlying PE investments are in trouble. However, as their modelling shows, they are very highly likely able to pay the interest and redeem upon maturity even if their portfolio is stressed.