Edinburgh University is borrowing £40 million through a bond issue to the Prudential finance group in order to restructure.
George Sutherland, Edinburgh's director of finance, said the university, which faces a £3 million deficit next year, had considered various options, including bank borrowing and raising funds against future student rent.
But a quirk in the market had pushed down long-term interest rates, making the bond the best option, he said. The university will repay £10 million after 15 years, with the remainder in instalments between 25 and 30 years.
"The most difficult time is not in 30 years when it has to be repaid. It is now," Mr Sutherland said.
If the scheme is successful, Edinburgh will save itself the £40 million "several times over" by the end of the term.
Edinburgh is still drawing up its strategy, which includes revamping its academic portfolio, increasing overseas student numbers and selling property. Until it finalises plans on how best to spend the £40 million, the funds will sit in the bank.
But Mr Sutherland said the "relatively low" rate of interest on it meant that the £40 million would accrue almost as much as had to be paid out.
Other higher education institutions have issued bonds, but generally to fund a project, such as a new building. "To the best of my knowledge, this is the first time an institution has borrowed for the general purpose of restructuring," Mr Sutherland said.
Edinburgh had succeeded because of its size, the diversity of its income, particularly research, and its management strategy. "They have confidence we can deliver. They regard us as a good bet," he said.