Assured Guaranty provides £113 million bond wrap for new university blocks
Assured Guaranty (AG) is guaranteeing bonds to finance new student accommodation at the University of Exeter, it announced last week. The monoline insurer will guarantee the principal and interest payments on £113 million of bonds issued by ULiving@Essex3 LLP.
The 45-year bonds have been sold to UK investors and were distributed in two tranches of fixed and index-linked debt. They reached financial close on 17 August 2021, taking advantage of low, long-term rates. The bonds are expected to be AA rated by S&P Global Ratings as a result of the backing by Assured Guaranty UK Limited (AGUK).
They will finance the construction of five new accommodation blocks housing 1,262 beds at Essex University’s Colchester campus. The deal is the third student accommodation financing guaranteed by AGUK for the university.
Dominic Nathan, Managing Director of AGUK, said: “Despite challenging market conditions generally and unprecedented overall public health and economic circumstances, our collaborative approach with the university and sponsors, along with investor demand for AGUK wrapped debt, has resulted in a successful deal for the university. We believe investors, whether direct lenders or bond purchasers, value the high rating and associated low capital charges our guarantee adds to long-term financings, along with the efficient asset-liability matching this type of investment can provide.”
Assured Guaranty has maintained a continuous presence in Europe since the mid-1980s but has ramped up its activity in the UK in recent years. University accommodation projects are a key market for the company, alongside other private finance initiatives. It’s guaranteed similar issues for universities such Durham, as well as for Belmarsh prison.
