Cambridge University is issuing its first ever bond, more than eight centuries after being founded.
The university is raising £350m through a 40-year security bond, which was priced in the City on Wednesday. The university is tapping the capital markets a week after being handed a top-notch AAA rating with a stable outlook by Moody's – a better credit rating than the Bank of England or the government.
The bond will yield about 0.6% more than a British government 40-year gilt, suggesting an effective interest rate of 3.85% over the lifetime of the loan.
Professor Sir Leszek Borysiewicz, vice-chancellor, said he was "delighted by the success" of the issue. Proceeds of the sale will be used to fund "general corporate purposes", including investing "in teaching and research at the highest international levels".
Last month Cambridge was ranked as the second-best university in the world, behind MIT.
Cambridge University is said to hold total assets of £4bn, after swelling its coffers during its 800 anniversary celebrations in 2009.
