University of Oxford plans first bonds issue

University of Oxford plans first bonds issue

University of Oxford
The University of Oxford is to issue its first ever bond in an effort to raise £250 million (US$332 million) on financial markets.

LONDON: The University of Oxford is to issue its first ever bond in an effort to raise £250 million (US$332 million) on financial markets, it said on Tuesday (Nov 28).

It is the latest British university to do so as the higher education sector comes under pressure from government cuts and seeks to benefit from very low interest rates.

Oxford "has appointed JP Morgan to hold a series of investor meetings while it considers a possible debut offer to the bond market", a spokesman said, confirming the amount.

Other UK higher education establishments have sought to diversify their finance base with bond offerings in recent years - the universities of Cardiff, Cambridge, Liverpool and Manchester all figured on a Bank of England list of bonds eligible for purchase in April of this year.

Credit rating agency Moodys gave the University of Oxford a triple A rating on Tuesday.

The prestigious university, north of London, is attended by more than 23,000 students across 38 colleges, and is the largest employer in the Oxfordshire region, supporting around 17,000 jobs.

Research grants and contracts were the University of Oxford's main source of income in 2015-16, to the tune of £537.4 million.

Its credit rating is on par with that held by the University of Cambridge, and higher than the UK government's current Aa2 status, which was downgraded in September over concerns Brexit could hurt the country's overall growth.

"The stable outlook on Oxford's rating reflects our view that Oxford is less susceptible to pressures affecting the UK higher education sector than its lower-rated UK peers due to its exceptional market position, diversified revenues, and resilient balance sheet," Moodys said in a press release on Tuesday.

The Financial Times reported that Oxford's debt obligations would have a 100-year duration.

Source: AFP/de

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