Royal Holloway, University of London, has raised £80 million by means of private placement of unrated debt to support investment in the development of its historic campus.
The placement achieved an average interest rate of just over three per cent per annum – some of the best pricing achieved by a UK higher education institution and a reflection of the increasing appetite for investors for the UK HE market.
The investment will enable Royal Holloway to undertake an ambitious development of its 135-acre Surrey campus to include a flagship new library and student services centre.
The Mills & Reeve team was led by banking partner Sarah Seed who said: “We are proud to be part of securing the future growth for Royal Holloway. The competitive pricing is a reflection of investor confidence in the University’s growth strategy, commitment to academic quality and financial health. It also shows the strong appetite of investors for lending to the UK higher education market. The deal
received interest from both UK and US investors, with the US investors, in particular, able to offer some extremely competitive rates. Our strong expertise in this sector means we are able to navigate our clients quickly and effectively through the process to secure funding.”
Graeme Robinson, Director of Finance for Royal Holloway said: “What stood out for me was the combination of expertise on debt fundraising and an in-depth understanding of the governance and legal issues affecting higher education offered by Mills & Reeve. They responded flexibly and proactively as the transaction developed, ensuring that we were able to meet the transaction timetable, and worked effectively with the investors’ US counsel.”
The successful bidder for the lending, which was arranged by Barclays, was Pricoa Capital Group and the notes are repayable as a mix of 20 year, 25 year and 30 year maturities.
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