Moody’s Investors Service has assigned an Aaa debt rating to the University of Cambridge’s inaugural bond issue, announced on 10 October.
The UK university’s bond market debut is a £350m is a senior unsecured obligation and reflects its Aaa issuer rating. The bullet bond issue, via HSBC, Morgan Stanley and RBS, will have a 3.75% coupon and mature in 2052. The issue follows three days of investor meetings in Edinburgh and London, which the banks said showed early indications of interest in what investors regard as a “unique opportunity”.
Moody’s comments that while the university has remained almost debt free to date, the £350m borrowing will result in a modest leverage relative to peers. It is expected that the bond proceeds will be applied towards further investment in research facilities, accommodation and other university assets. The largest investment currently being considered by the university, which recently marked its 800th anniversary, would be the development of a site in the northwest of Cambridge, including the creation of 1,500 housing units for research staff and 100,000 square metres of research space.
With a long-dated issue, the university aims to tap into UK pension and insurance funds, which have longer investment horizons. The only other UK university to fund in the capital markets is De Montfort University, Leicester, rated Aa1 by Moody’s. In July, Barclays led a £100m 5.375% June 2042 issue, following two weeks of investor meetings in the UK, the paper offering a yield of 5.625%.
On 2 October, Moody’s assigned an Aaa issuer rating to the University of Cambridge, reflecting its outstanding market position, significant amount of liquid assets and strong governance structure. It
also took into account the expected increase in the university’s debt-to-revenue ratio to a modest level.
Cash-flow based metrics now feature prominently alongside traditional revenue measures of business performance in the key figures or financial summary pages of any public company.
The US money market fund reforms came into effect in 2016 and are already dramatically shaping US fund industry with investors flooding out of prime funds and into government securities. While the reforms are similar, they are not the same. GTNews interviews Yeng Bulter, global head of the cash business at State Street Global Advisors on the differences.
With the end of 2017 fast approaching, many finance professionals might be counting down the days with some degree of dread. Year End is just around the corner and with it comes the many long hours accountants will spend going over balance sheets and profit and loss accounts, investigating account irregularities and chasing sign offs.
The top five sectors Asian fintech investors are interested in are data analytics, blockchain, lending, payments and regtech, according to Gary Hwa, EY regional managing partner.