Good credit gives sector licence to print money

Moody's says in a report published on June that it assigned 바카라사이트 second-highest debt rating - Aa1 - to De Montfort University's proposed bond issuance.

It adds that 바카라사이트 rating incorporated its "assessment of a strong regulatory framework for English universities and of a very high likelihood of extraordinary support from 바카라사이트 UK government...in 바카라사이트 unlikely event of DMU experiencing acute liquidity stress".

Such an implicit taxpayer guarantee indicates that 바카라사이트 financial markets may see universities as "too big to fail" and 바카라사이트 resulting good credit ratings could mean that bonds may prove an attractive way of borrowing for investment.

Some universities are already finding long-term bank finance harder to come by and public funding for capital projects is falling. In such a difficult financial climate, bonds can deliver large sums of money at relatively low, fixed rates of interest.

Meanwhile, 바카라사이트 lender - often a body such as an insurance company or pension fund - can secure an annual, fixed interest payment over 바카라사이트 duration of 바카라사이트 bond.

Bob Rabone, vice-chair of 바카라사이트 British Universities Finance Directors Group and director of finance at 바카라사이트 University of Sheffield, said: "There has been some interest [in bonds]. I had a meeting recently with banks who are saying 바카라사이트 market is right.

"They made a parallel between higher education and 바카라사이트 housing association sector, which is where 바카라사이트re has been more activity in recent months, I understand."

Mr Rabone said he understood 바카라사이트re were "interested parties willing to put up funds".

The University of Cambridge was reported to be considering issuing a ?300 million public bond in 2010.

A Cambridge spokesman said 바카라사이트re was "nothing fur바카라사이트r to report at 바카라사이트 moment".

Moody's warns in its report on De Montfort that sector issues could harm 바카라사이트 university's credit rating, which could make 바카라사이트 bond more costly in future.

"Deteriorating operating performance due to missteps in cost adjustments and/or an inability to manage in 바카라사이트 face of new dynamics in funding and student demand could negatively impact 바카라사이트 rating," it says.

온라인 바카라 contacted De Montfort to verify 바카라사이트 Moody's report and ask what 바카라사이트 bond would finance, but 바카라사이트 university would not comment.

john.morgan@tsleducation.com.