Assured Guaranty subsidiary guarantees UK college bonds

17-08-2018

Assured Guaranty Europe (AGE), a subsidiary of Bermuda-based Assured Guaranty, has announced that it has guaranteed principal and interest payments on approximately £90 million of bonds issued by Mount Oswald Colleges.

The bond issuance will finance the construction of two new colleges designed for student residence at Durham University in the United Kingdom. As a result of the guarantee from AGE, the bonds are rated AA by S&P Global Ratings.

The 46-year inflation-linked bond, whose pricing on 14 August 2018 took advantage of low long-term rates, was issued as a private placement into the UK market.

Interserve will build the halls within two years, and Campus Living Villages will undertake facilities management services over the project term. Equitix is the main sponsor of the project company, with CLV as a co-sponsor. The University has a 15 percent stake in the project company.

The two new colleges financed by the bonds will provide a total of approximately 1,000 new bedspaces for Durham students. Both colleges will be located on campus, next to existing colleges, and are designed to house both undergraduate and postgraduate students in a mix of en-suite and townhouse units.

“We are delighted to have closed another student accommodation financing for such a prestigious university,” said Dominic Nathan, managing director, AGE. “Our wrapped bond solution, with long maturities and inflation-linked debt, continues to provide an efficient form of financing for projects of this type. The underlying demand for Assured Guaranty wrapped paper remains strong, as investors are attracted by the high rating we provide to the bonds and the associated low capital charges, as well as the efficient asset-liability matching this type of investment can provide.”

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