10 Oct 2009

University to raise money in bond issue

8:14 am on 10 October 2009

The University of Canterbury hopes to raise $100 million through New Zealand's first listed philanthropic bond issue.

Vice-chancellor Rod Carr says the university wants to undertake a capital works programme worth $500 million over the next ten years.

It will issue a retail bond at a commercial rate of 7.25% and, after 5 years, 175 basis points over the swap rate.

Dr Carr says interest payments to investors will be funded through the university's operating surplus of between $10 million and $20 million a year.

The offer is for $50 million in fixed rate bonds, with the ability to accept oversubscriptions of a further $50 million dollars.

The offer is expected to open on 12 October and close on 30 November.