Investors Piled in for Aussie Universities
By Athena Yenko | June 25, 2014 12:38 PM EST
The University of Melbourne and the University of Sydney are now borrowing from capital markets to fund academic researches and campus expansions.
Investors are piling in as these two universities have not borrowed from capital markets in the past.
"Investor demand for these Australian university deals is strong. We've had two come to market and they've been well received, so there may be an opportunity for some of the other big universities to look at issuing as well," Gavin Goodhand, money manager at Altius Asset Management Pty told Bloomberg.
Goodhand administered an impressive A$550 million bond sale.
"It's good for the market that we're seeing increased diversity. Investors would probably jump at the chance to buy if another university came to market," Goodhand added.
University of Melbourne
"The issue was for A$250million on a seven year tenor and attracted extremely strong interest from Australian and Asian investors. The issue takes advantage of current favourable conditions in financial markets and the University's Standard & Poor's AA+ (stable) credit rating (with the issue being similarly rated). The joint lead managers were Australia & New Zealand Banking Group and National Australia Bank" University of Melbourne said in a statement.
Its debentures were sold at 80 basis points, sales managers from Australia & New Zealand Banking Group Ltd. and National Australia Bank Ltd. confirmed in an e-mailed statement obtained by Bloomberg. Initial offering for the university was marketed at a spread of approximately 85 basis points with a minimum size of A$100 million.
The sales acquired will be use to enhance infrastructure and programmes for the university.
"The University of Melbourne has completed its first bond issue to support a range of strategically significant initiatives. It will be used to refinance existing debt on more efficient terms and to finance core, self sustaining projects, such as student housing," the statement from the university reads.
University of Sydney
The University of Sydney amassed A$200 million sales from a 4.75 per cent similar maturity in April.
ANZ and NAB also managed the transaction for the University of Sydney at an 88 basis-points spread over the swap rate.
The university is rated Aa1 by Moody's Investors Service.
According to a statement by Moody's, University of Sydney has established a A$600 million issuance program that will fund future research and education programmes.
The university had also refinanced a A$500 million bank loan maturing in 2016, according to Moody's.
New South Wales universities - Macquarie University and University of Wollongong - were the most recent universities to sell domestic notes.
To contact the editor, e-mail:
Most Popular Slideshows
- NFL MNF: Pittsburgh Steelers 30, Houston Texans 23 [PHOTOS]
- 2014 MLB World Series Game 1: San Francisco Giants 7, Kansas City Royals 1 [PHOTOS]
- 2014 MLB World Series - Game 2: Kansas City Royals 7, San Francisco Giants 2 [PHOTOS]
Join the Conversation
- Economic Growth In US And Sub-Saharan Africa Allay 2015 Recession Fears
- Travel Alert: Over 200 Canadians Infected with Mosquito-Borne Chikungunya Virus
- Canadian Ebola Drug: Tekmira Firm Starts Limited Manufacturing of Vaccine, Available By December; Shares Up
- US Dedicates 5 Airports for Travellers From Ebola-Stricken Nations, Lawmakers Want Travel Ban
- WHO Races to Release Ebola Serum in 2 Weeks, Vaccines in January
- Xiaomi Redmi 1S vs. Sharp Aquos Crystal – Specifications, Features And Price Showdown
- ASUS Releases A Teaser Indicating The Arrival of New Zenfone and ZenWatch On October 28
- Boy Stoned To Death For Alleged Rape, Victim Receives Dowry From Militants
- Three Dual SIM Samsung Galaxy Note 4 Duos Variants Comes To China
- Russia is Creating Underwater Combat Robots to Protect its Arctic Territories
- ‘Lone Wolf’ Attack on Canada Parliament Hill Could be ISIS-Related
- Android Lollipop 5.0 Confirmed for Nov 3 Rollout as Nexus 6 Global Release Date is Delayed – Reports