Cambridge University looks to bond market for £300m debt raising
Cambridge University may issue its debut bond within six months, according to the university’s finance director. And with the bank lending market significantly contracted and the government likely to slash support for higher education, other universities may look to the bond market to raise funds.
Cambridge wants to raise around £300 million to fund two large-scale projects. The first involves improvements to accommodation and research facilities in northwest Cambridge, while the second is related to sites in central Cambridge.
Andrew Reid, Cambridge’s finance director, says the university will probably elect to raise the money through a public bond issue. If it does so, the bond will be a fixed rate and long-term issue, with a maturity of 35 years or more. He adds Cambridge’s cashflows are insufficient alone to fund the improvements; the university’s consolidated turnover is around £1.2 billion, and it has net assets of £2.2 billion …