Allen & Overy advised Leicester based De Montfort University on a GBP110 million bond issuance, the first public bond issue by a UK university since 1998.
The issue proceeds from the 30 year bonds, which were rated Aa1 by Moody's, will be used to invest in the university's infrastructure.
Raising funds through a public bond issue in the debt capital markets is an innovative step for a UK university, the most recent such issue being by the University of Greenwich in 1998. However, it follows in the footsteps of other public sector and quasi-public sector entities, such as the Greater London Authority and housing associations, who have opted to obtain funding through the debt capital markets as a result of bank finance constraints and decreased government funding.
International Capital Markets partner Geoff Fuller commented: "The capital markets have provided a way to fill the gap in funding for public sector entities. Housing associations have been issuing bonds for the past five years and have met strong investor interest because of their stable business model. We expect universities to follow suit."
Allen & Overy has an impressive track record advising on public sector debt finance deals, including advising the UK Debt Management Office on all of its gilt auctions and syndications, advising Lloyds as arranger in respect of the Greater London Authority's GBP600 million bonds in 2011 and acting on 29 of the 31 secured public bond issues in the UK social housing sector since 2008.
The Allen & Overy team was led by International Capital Markets partner Geoff Fuller and counsel Beth Collett, with the assistance of associate Joanna Bell. Barclays Bank PLC acted as bookrunner, while U.S. Bank Global Corporate Trust Services acted as Trustee.
For further information, please contact Margherita Orlandini, margherita.orlandini@allenovery.com on +44 (0)20 3088 4196.