Linklaters advises as University of Cambridge pioneers CPI linkage in £600m bond issue

King's College Cambridge 

The University of Cambridge is issuing a pioneering bond linked to the consumer prices index (CPI). The bond is notable as it uses the CPI rather than the retail price index (RPI).

The University is issuing £300m of 50-year index-linked debt referencing the consumer price measure of inflation and £300m of 60-year conventional fixed rate debt.  Linklaters is advising Barclays, HSBC and Morgan Stanley as the banks acting as joint lead managers on the issuance.

Elaine Keats, Capital Markets partner at Linklaters, says: “This is a notable moment for the UK bond market and demonstrates a forward thinking approach to financing. There haven’t been many significant CPI-linked deals issued by corporates in recent years and if this helps to put liquidity into the market, this could certainly be a turning point.”

The Linklaters team was led by Capital Markets partner Elaine Keats and managing associate Mark Longworth. Linklaters previously advised the underwriters on Cambridge University’s 2012 £350m 40 year bonds and more recently advised Oxford University in December 2017 as it issued the first ever 100-year bond raising £750m.  Both Cambridge and Oxford Universities have a AAA rating – a better credit rating that the Bank of England or the UK Government.