LONDON (Reuters) - Britain’s University of Oxford, the oldest university in the English-speaking world, raised a record 750 million pounds ($1.01 billion) with its first ever bond on Friday.
Armed with a newly-minted triple A credit rating - higher than the UK government’s - the university raised the money with a bumper 100-year bond that paid buyers just over 2.5 percent interest.
Oxford, which started teaching in 1096, topped a Times global university ranking for the first time last year. It said it would use the money to improve its facilities, building new ones and refurbishing others.
“We are heading into the next decade, we have to think about the future and this should help us stay at the top of our game,” Oxford’s Pro-Vice-Chancellor for planning and resources David Prout told Reuters. “It will allow us to invest with confidence”
Individual Oxford colleges have issued debt in the past but this sale was the first by the university as a whole. In total seven UK universities have now issued bonds publicly, the first being by Oxford’s main rival Cambridge, which raised 350 million pounds in 2012.
Demand for Oxford’s bond, which will not be paid off until December 2117, reached some 2 billion pounds, Prout said, calling it “a fantastic statement of confidence” in UK higher education in general.
British universities are facing uncertainty as the country prepares to leave the European Union in 2019. Brexit could hurt their finances if they are no longer allowed to be part of lucrative European research projects and it becomes harder to attract or keep students and staff.
They also face growing political pressure over the level of tuition fees charged by universities as students are racking up large debts they may struggle to repay.
“I think the whole higher education sector is worried about the debate around tuition fees, but at Oxford we are in a bit of a unique situation (due to our reputation),” Prout said.
($1 = 0.7403 pounds)
Reporting by Marc Jones; Editing by Gareth Jones