England's oldest higher education institution, Oxford University, is set to sell 100-year debt in an effort to raise funds.
The bond, which is expected to raise at least £250m, would be the first from Oxford University as a whole. Its colleges have previously tapped the debt market – University College raised £40m in bonds in 2015.
Moody's assigned a triple-A rating to the debt, saying this reflected its “extraordinary market position as one of the world's elite universities” and its “position as a world-leading research institution”.
“Oxford has seen consistently strong demand from students, both domestic and international, which we expect to continue,” said senior analyst Jeanne Harrison in the agency's rationale statement.
Moody's added that Oxford University has a “strong balance sheet with a large endowment and low leverage.” Its research funding last year, of £730m, was the highest amongst its UK peers.
But Oxford University's overall profitability “is weaker than its peers”, driven by high staff pay, low overhead recovery from research, and increases in non-pay departmental spending.
Oxford's bond is the latest in a string of instances where UK universities have turned to the financial markets to raise cash, after government spending on higher education has shrunk in the wake of tuition fee increases. With a 100-year maturity, Oxford's will have the longest duration of any higher education bond.
Last year, Cardiff University raised £300m through a bond with a 3.1 per cent interest rate.