Bond: Licence To Build
Cambridge University is pondering issuing up to Â£300 MILLION of bonds to fund extensive building works.
Cambridge University is pondering issuing up to £300 MILLION of bonds to fund extensive building works.
The move would be unprecedented in Cambridge’s 800 year history.
However, Cambridge can look to uni heavyweights on the other side of the pond for guidance, as Ivy League schools are no strangers to the bond business.
In the UK, Lancaster University also launched a similar scheme in 1995 to develop its campus.
Under the proposal, Cambridge would borrow the cash from lenders who would be repaid plus interest, by a set date in the future.
The plans come just weeks after Business Secretary Peter Mandelson announced a £400 million cut to University funding for the upcoming academic year.
With an estimated £4.1 billion endowment, Cambridge is in a better position than most to shoulder the burden. However, a statement issued by the University said extra funds were needed to fund two large projects.
The first is a development of staff and student housing in north-west Cambridge. The second is a renovation of two town-centre sites, Old Press and New Museums.
According to one undergraduate, whose faculty is based on Free School Lane’s New Museums site, the area is a “grimy maze” that could “well do with a lick of paint”.
A PPS student, also based at New Museums disagreed: “it’s certainly rudimentary, but in a charming way. I quite like the tumble-down look.”
The pricey projects demand special funds according to the University. "Cash flows from…regular operations will be insufficient for such major expenditure and external financing will be required" the statement said.
"Bank financing, private placement or public bond issue are possible routes. An indicative range is £200-300 million.”