Cambridge colleges raise £150 million through bonds

A group of colleges at the University of Cambridge have collectively raised £150 million for capital projects through the private debt market.

December 24, 2013

The bonds have been arranged privately with a small group of investors and cannot be listed on the stock exchange or traded.

It is thought to be the first time that a series of smaller colleges have joined together to issue private bonds in the higher education sector.

The law firm advising on the deal, Mills and Reeve, said it could provide a model for other universities wanting to secure investment.

The Cambridge colleges will use the funds to finance on-going programmes in college buildings. There are 18 colleges involved in the scheme including Christ’s College, King’s College and Trinity Hall.

Together, three bonds were arranged through “special-purpose” intermediary companies with the money then lent on to the colleges. The bonds have an average interest rate of 4.42 per cent and average maturity of almost 33 years.

Each individual college has borrowed between £3 and £18 million and the loans are separate so that no college is accountable for another’s debt.

Sarah Seed, banking partner at law firm Mills and Reeve, said: “The reality is that the higher education sector in the UK, and across the world, is experiencing significant change. This requires new solutions, especially in the area of finance.”

Raising funds through private, rather than public, debt placement means that no credit rating is needed.

Last year, the University of Cambridge itself issued a £350 million public bond to raise money for building projects.

holly.else@tsleducation.com

You've reached your article limit

Register to continue

Registration is free and only takes a moment. Once registered you can read a total of 3 articles each month, plus:

  • Sign up for the editor's highlights
  • Receive World University Rankings news first
  • Get job alerts, shortlist jobs and save job searches
  • Participate in reader discussions and post comments
Register

Have your say

Log in or register to post comments

Featured Jobs

PhD Scholar in Medicine

University Of Queensland

Manager, Research Systems and Performance

Auckland University Of Technology

Lecturer in Aboriginal Allied Health

University Of South Australia

Lecturer, School of Nursing & Midwifery

Western Sydney University

College General Manager, SHE

La Trobe University
See all jobs

Most Commented

women leapfrog. Vintage

Robert MacIntosh and Kevin O’Gorman offer advice on climbing the career ladder

Woman pulling blind down over an eye
Liz Morrish reflects on why she chose to tackle the failings of the neoliberal academy from the outside
White cliffs of Dover

From Australia to Singapore, David Matthews and John Elmes weigh the pros and cons of likely destinations

Mitch Blunt illustration (23 March 2017)

Without more conservative perspectives in the academy, lawmakers will increasingly ignore and potentially defund social science, says Musa al-Gharbi

Michael Parkin illustration (9 March 2017)

Cramming study into the shortest possible time will impoverish the student experience and drive an even greater wedge between research-enabled permanent staff and the growing underclass of flexible teaching staff, says Tom Cutterham