UBC bond sells in record time
UBC's entry into the capital markets via a bond issue sold out
within 90 minutes of becoming available last week. The bonds raised
$125 million for the university.
The largest single use of the funds will be for the construction
or improvement of housing for students, faculty and staff. Other
uses will include ancillary business expansion and energy retrofits.
Repayment of the borrowed funds will be from rental payments, cost
savings and other revenues.
"This form of financing, new for universities in Canada, will help
fund our Trek 2000 strategic vision to attract the highest quality
students, faculty and staff from across Canada and around the world,"
says UBC President Martha Piper.
UBC took its first step into the markets when it received very
favourable Aa3 credit rating from Moody's Investor Services and
AA- from Standard and Poor's. Both agencies noted UBC `s strong
reputation for teaching and research excellence as major draws for
students.
UBC is only the second large university in Canada to seek to raise
a sum of this size in a broad-based capital markets financing. This
summer, the University of Toronto launched a highly successful issue
of $160 million of long-term debentures.
"Given UBC's similar credit ratings to those of U of T, we anticipated
equal success," says Byron Braley, UBC treasurer.
UBC's bond offering was led by RBC Capital Markets, with a syndicate
that includes CIBC World Markets Inc. and Scotia Capital.
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