CC, Linklaters and Mills & Reeve lead on Cambridge University bond issue

Clifford Chance, Linklaters and Mills & Reeve have advised on a bond issue by the University of Cambridge, the second in a recent spate of attempts by UK higher-educational institutions to tap the capital markets.


David Bickerton
David Bickerton

The 800-year-old university has opened up the 40-year, £350m bond to investors after Moody’s last week granted the corporation an AAA credit rating, setting it apart as one of the world’s most attractive universities as an investment.

Clifford Chance and Linklaters both won pitches to advise on the bond, advising the university and the banks respectively.

Clifford Chance London and Middle East regional managing partner David Bickerton and fellow capital markets partner Simon Sinclair led for the university alongside associates Patrick Dougherty and Claire Bernard.

Linklaters capital markets partner Nigel Pridmore headed a team for joint lead managers HSBC, Morgan Stanley and the Royal Bank of Scotland. Both Pridmore and Bickerton are Cambridge graduates.

The Linklaters team also comprised managing associate Neil Pallender and associate Karen Cheng, both of whom are debt capital markets lawyers, and tax partner Dominic Winter.

Mills & Reeve, longstanding lawyers to the university, was co-adviser alongside Clifford Chance on capital markets and constitutional matters.

It fielded capital markets partner Stephen Hamilton and banking partner Sarah Seed as the lead partners working out of Cambridge. The team also included real estate partner Andrew Wood, partner and university business group head Gary Attle, finance associate Matthew Howling and corporate senior solicitor Jonathan Greenwood, all of whom are based in Cambridge.

Background to this deal:

The deal follows a £110m bond issue by De Montfort University earlier this year in which Allen & Overy capital markets partner Geoff Fuller and counsel Beth Collett advised the university and Linklaters’ Pridmore acted for Barclays Bank, the bookrunner. The bond was spoken of as the first by a UK university since the 1990s, with the University of Greenwich issuing one in 1998.

The Cambridge bond, one of the first by a top-tier university, is legally distinct because the university is a common-law corporation without documents confirming its foundation. It only exists as a corporation because people treat it as such, with the university thought to have first been recognised by Pope John XXII in 1318. A string of Acts of Parliament starting in 1571 then granted it more official recognition. As a result, the bond is technically being issued by “the Chancellor, Masters, and Scholars of the University of Cambridge”.

Mills & Reeve, an established adviser to the university, guided it through these constitutional matters, with Attle handling such issues.

Cambridge’s global status and AAA credit rating also marks it out as a particularly strong investment opportunity, with the recent Moody’s rating even surpassing that of the UK government, which has a rating of AAA with negative outlook.

The recent duo of university bond issues follows cuts by the Government to higher-education spending, forcing institutions to seek new sources of long-term funding.

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