Bond issue to halt the brain robbery
The University of Canterbury plans to raise up to $100 million for major capital projects through New Zealand's first listed philanthropic bond issue.
Friday, October 9th 2009, 1:08AM
Vice-Chancellor Rod Carr says the issue is an opportunity for New Zealanders to make a direct investment in education infrastructure and help the University progress from being a high-quality institution to one that can truly call itself host to a world-class learning environment.
Dr Carr says in the next 10 years the University plans to invest as much as $500 million in developments such as building refurbishments, new buildings, ICT infrastructure and alternative technologies to develop a world-class learning environment that attracts outstanding scholars from across the spectrum of academic disciplines.
"We need to promote a learning environment that attracts people who have the desire and potential to make a difference. We owe it to our children and grandchildren to do all we can to stop what I fear could become the great brain robbery.
He says universities in Australia, India and China are not only better equipped than New Zealnd ones and there is a need to catch up to them. Currently the university's ambition to realise its potential is being constrained by the funds it retains from grants and fees for teaching and research, one-off grants from government, and donors.
"This bond issue, the first by a New Zealand tertiary institution, aims to secure additional resources for world-class teaching and research facilities that will enable the acceleration of the current investment plan."
The university is looking to raise at least $50 million, and accept over-subscriptions of a further $50 million. The bonds will have a 10-year term and also have some philanthropic options.
Investors will have the option of reducing the interest to zero for some or all of their bonds. That reduced burden on the University will enable it to fulfil its capital works programme sooner than would otherwise be the case.
Carr says that during the term of the bond the university will also invite investors to consider donating part, or all, of the sum owed on maturity.
"We will continue to pay the investor interest on bond principal they have donated if they so elect," he says.
"This optional philanthropic element of the bond issue will allow investors to direct their support to higher education while tailoring their contribution in light of their own circumstances which may change over the term of the bond."
For the first five years the rate will be 7.25%, with the rate then reset for a further five years, at a margin of 1.75% over the then prevailing 5 year swap rate.
| « Fixed income investors need to go long for returns | SBS rules out finance company acquisitions » |
Special Offers
Commenting is closed
|
|
Printable version |
|
Email to a friend |
