The University of Oxford’s debut issue took the award for Bonds below £750m.
In this hotly contested category, the University of Oxford’s £750m corporate bond stood out for a number of reasons – not least of which was its remarkable 100-year tenor.
With the university aiming to maintain its position at the top of global university rankings, the institution had put in place an ambitious capital plan to build and maintain world-leading facilities.
These facilities are expected to play an essential role in supporting both research and teaching, while helping to attract the best academic talent from around the world.
The university was therefore seeking funding from the capital markets in order to plan this programme with confidence and achieve long-term funding stability.
While some of the individual Oxford colleges had previously raised funds via the private placement market, this was the first time that the central university had issued debt.
The deal was a very large transaction for the university, but it was the 100-year tenor that particularly caught the judges’ attention
As such, the university needed to obtain a credit rating during the course of the transaction – an exercise that involved coordinating multiple workstreams in order to prepare the relevant information for the rating agency.
The process was managed robustly, and the resulting Aaa rating given by Moody’s was higher than that of the UK government.
As a first-time issuer, the treasury team was supported by internal finance teams and senior executives, as well as by JPMorgan and Linklaters. Given the complexity of the organisation, strong communication was needed to meet the deal’s aggressive timetables.
The resulting £750m bond was oversubscribed, enabling the university to tighten pricing and thereby improve the overall coupon. As a result, the bond had a low cost of borrowing at only 2.544%.
The deal was a very large transaction for the university, but it was the 100-year tenor that particularly caught the judges’ attention.
As well as being noteworthy as the longest-ever issue for a debut bond – and one of only a small number of such bonds by a European corporate – the issue was also longer than any public issue of UK government bonds or gilts.
“How many entities can do this kind of transaction? The University of Oxford really took advantage of its longevity to complete this blowout deal.”
Provider JPMorgan Cazenove
Structure 100-year, £750m corporate bond
The judges also gave honourable mentions to several of the other entries in this category, including some innovative uses of the US private placement market. These include:
The Treasurer’s Deals of the Year Awards recognise the outstanding work of treasurers, both within the treasury community and the wider business world. Through them we champion the success and achievements of treasury teams that have stood out in the market over the prior 12 months. Winning an award is a great way to strengthen your organisation's and your treasury's profile, bringing peer and industry acknowledgement.
This article was taken from the Deal’s Edition 2019 issue of The Treasurer magazine. For more great insights, log in to view the full issue or sign up for eAffiliate membership