De Montfort takes plunge into bond market

The post-1992 university said the 30-year bond - £20 million of which will be held in reserve - would be invested in “transforming the campus and improving the student experience”.

In a statement, the university added that the “money borrowed will be used to fund building work and will not be used for the day-to-day running of the university”.

It also said that its “radical approach to raising money is being watched by dozens of other universities, and they are expected to follow suit”.

De Montfort released its statement after Times Higher Education reported that the university was on the verge of issuing a bond after securing an Aa1 credit rating from Moody’s - the second-highest possible from the agency.

Dominic Shellard, vice-chancellor of De Montfort University, said: “This is a key moment in the history of DMU.

“The university has succeeded in raising a significant amount of money to allow us to invest heavily in the student experience at a crucial time.

“The recent change to the way universities are funded, combined with the cuts in spending by the government, means that we have to find new ways to continue to improve our offer to students.

“The fact that Hefce [the Higher Education Funding Council for England] has given formal ‘consent’ for DMU to obtain the bond and investors have agreed to loan us so much money, is a tremendous vote of confidence in our university.

“We know that a large number of universities are looking for ways to raise funds - DMU is at the vanguard in this respect and we understand other universities are exploring similar funding opportunities.”

The university said the £90 million could be used for projects such as funding a new building for the Faculty of Art, Design and Humanities; the creation of a public open space to become the new centre of the campus; the refurbishment of the students’ union; and sports fields for all student teams.

john.morgan@tsleducation.com