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University of Cambridge raises £600 million in pioneering bonds issue

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The proceeds will be used to invest in the University’s revenue-generating projects and other facilities, allowing Cambridge to further its mission to contribute to society through the pursuit of education, learning, and research at the highest international levels of excellence.  

The bonds are issued in two tranches:

1.    A £300 million bond with a fixed interest rate of 2.35%, repayable in 60 years’ time; and

2.    A £300 million bond with an interest rate of 0.25%, repayable in equal annual instalments between 10 and 50 years (‘amortising’), with those payments of principal and interest being linked to any rise in the Consumer Prices Index (CPI), within a ‘floor’ and ‘cap’ of 0% to 3% per annum.

The amortising CPI-linked issue is particularly innovative, and is believed to be amongst the first of its kind in the UK bond markets.  Both bonds are expected to be rated Aaa by Moody’s, the highest credit rating that it awards.

Commenting on the bonds, the Vice-Chancellor, Professor Stephen J Toope, said: “We are delighted by the success of today’s bonds, which shows the confidence that investors have in the University, its mission, and its growth strategy in the years ahead.”

Barclays, HSBC and Morgan Stanley acted as Joint Bookrunners.  Rothschild provided independent debt advice to the University.  Clifford Chance and Mills & Reeve provided joint legal advice to the University and Linklaters provided legal advice to the Joint Bookrunners.

Cambridge Chief Financial Officer Anthony Odgers said: “We knew we were doing something unique with the CPI-linked bonds and that has really paid off with the enthusiastic reception in the market, the tight pricing and the collar.”

The University of Cambridge today announces that it has priced £600m of bonds. 

We are delighted by the success of today’s bonds, which shows the confidence that investors have in the University, its mission, and its growth strategy in the years ahead.
Vice-Chancellor Professor Stephen J Toope

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