London — 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.
On Friday, the University of Oxford priced £750m of bonds due in 2117 to yield just more than 2.5%, in what may be the first 100-year obligation 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 note, 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 about 5.125% above 30-year treasuries when it was priced and Austria’s euro-denominated securities were priced at 50 basis points over the country’s 30-year benchmark.