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Oxford Uni issues Triple A 100-year bond.

Gilts, bonds, and interest-bearing shares
forrado
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Oxford Uni issues Triple A 100-year bond.

#100770

Postby forrado » December 2nd, 2017, 12:13 pm

In case anyone missed it …

“Oxford University raises £750m after issuing 100-year bond and can 'confidently' plan for the future”
http://www.oxfordmail.co.uk/news/15697684.Oxford_University_raises___750m_after_issuing_100_year_bond_and_can___39_confidently__39__plan_for_the_future/

The 100-year maturity on the bond, with a coupon rate of 2.5%, is the longest of any other universities that have issued bonds. The University decided to raise the money - the first ever bond it has issued - as conditions in the financial markets permit borrowing at historically low rates.
Moody’s have AAA rated the bond and I understand JP Morgan, as the sole book-runner, had no problems floating this £750-million bond issue. Initially tasked with raising £250-million the FT reports this was soon raised to £750-million as a result of strong UK and overseas demand.

The issue makes Oxford the latest in a series of UK universities to enter the bond market. Last year, Cardiff borrowed £300-million in 40-year debt at just 3.1 per cent, while Bristol borrowed £200-million from a US investor in May this year. Having long been a practice of universities in the US, it’s noticeable of late that UK universities have been turning to the bond investors to raise capital. But the Oxford £750-million issuance is by far the largest and longest maturity to date.

Who’ll be next! Cambridge.

flopski2
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Re: Oxford Uni issues Triple A 100-year bond.

#102386

Postby flopski2 » December 7th, 2017, 10:36 am

Cambridge issued a 40 year bond in 2012. This offered a 3.75% coupon at the time. Price is now near 139 level or a GRY of around 2.1%. Note that minimum size of this and the Oxford bond is £100,000. A number of other universities have issued bonds since 2012 - De Monfort, Cardiff, Leeds, Manchester and Southampton. Only Cambridge and Oxford have been rated Aaa by Moody's (i.e. better than the UK).

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Re: Oxford Uni issues Triple A 100-year bond.

#102833

Postby JMN2 » December 8th, 2017, 7:15 pm

No wonder the minimum size is pretty high and astronomical for the rest of us buying bonds at 2-3% yield is simply bonkers.

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Re: Oxford Uni issues Triple A 100-year bond.

#102837

Postby JMN2 » December 8th, 2017, 7:40 pm

JMN2 wrote:No wonder the minimum size is pretty high and astronomical for the rest of us buying bonds at 2-3% yield is simply bonkers.


edit: sorry, not sure where I saw the min size would be 100k, regardless, only a big family wealth fund would buy bonds at 2% yield.


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