For the first time in its 800- year history, Cambridge University plans to issue bonds to raise money from the markets, a varsity official said.
The university was considering turning to the bond market to raise £400 million to fund two of its capital projects aimed at developing its residential and research facilities, The Times reported.
Andrew Reid, the university’s finance director, has admitted he was worried by the step into the relative unknown. But, insisted it was the best way to secure the huge sums of money required for two one-off building projects.
“We usually raise money through benefactors but this time we need a significant sum, so are turning to other methods. At the moment, we are completely unleveraged. It worries me. But we are a very stable organisation and we need to manage our finances properly.”
“We remain open to bank financing, private placement or public bonds, but the value of funding we anticipate needing, and the term (we are looking at 30 to 40 years) suggests that a bond issue is likely to be the best way forward,” he told the British newspaper.
The university’s recourse to the bond market, a trend set by some institutions in the United States, isn’t due to penury. Its investment assets as a whole are currently valued at about £4 billion.