A NORTH-East university has secured £225 million of borrowing to help fund its controversial strategy over the next decade.
Durham University has secured the investment through its first ever capital markets issue, a move aimed at accelerating investment in its estate.
The university is carrying out a significant programme of refurbishment to its existing buildings, as well as building new ones.
The estates programme is part of its ten-year strategy, which has proved unpopular with Durham city residents, which also includes plans to expand student numbers to around 21,500.
The funds will be provided by one UK and five North American institutional investors and was secured through a private placement.
Vice-chancellor Professor Stuart Corbridge said the investment would help enhance the university’s position as “number one” in the UK.
He added: “I warmly welcome the confidence in Durham University that investors have shown.
“The private placement will also help the university perform even better for Durham City and North-East England.”
Lloyds Bank and Santander UK acted as joint Placement Agents for the transaction.
Stephen Valvona, from Lloyds Bank, said it reflected the strong interest and confidence in the university while Tony Ford, head of private placements at Santander, said it showed there was broad-based support for Durham’s strategy going forward.
Pension Insurance Corporation has invested £145 million of the £225 million.
The funding is very long-dated, with £70 million maturing in 2058 and £75 million maturing in 2067.
Elizabeth Cain, the company’s senior debt origination manager, said: “We are delighted to have been able to work with Durham on this transaction, helping to fund the university’s estate masterplan.
“The private nature of the transaction means we were able to develop a maturity profile which works for both institutions.
“This is our single largest investment in the university sector and its very long-term maturity date reflects the strength of the university, a high-quality institution with an outstanding reputation, as well as the long-term nature of our business.”
Estate developments include a £40m teaching and learning centre, £31m investment in sports facilities at Maiden Castle, two new colleges at the £85m Mount Oswald project and a £40m new maths and computer science building.
Future plans include the redevelopment of lecture theatres in New Elvet, a business school at the former city baths and a replacement for the students’ union building at Dunelm House.
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