Double First From Oxford as University Debuts With Century Bond

(Bloomberg) -- Not many institutions could sell 100-year debt in their first foray in the capital markets. But then, not many have been around since the 11th century.

The University of Oxford on Friday will price 750 million pounds ($1 billion) of bonds due in 2117 to yield around 2.50 percent, in what may be the first 100-year bond to be sold by a debut issuer, according to data compiled by Bloomberg. While the sale is not the only bond to have originated in Oxford -- some of the university’s colleges have sold debt in the past -- it is the first from the institution as a whole.

The university joins a host of higher education institutions to have tapped debt capital markets as they diversify sources of long-term funding. But none has attempted a century-long debt, let alone in a debut sale. The success of the issue underscores just how conducive market conditions have become, with interest rates still near rock bottom and investors crowded out of many high-grade names thanks to quantitative easing.

Meanwhile, demand for longer-duration debt remains robust. Argentina and Austria sold similar century bonds earlier in 2017. Argentina’s dollar bond yielded around 5.125 percent above 30-year Treasuries when it priced and Austria’s euro-denominated securities priced at 50 basis points over the country’s 30-year benchmark.

©2017 Bloomberg L.P.