University’s £80m refinancing

LANCASTER University has completed an £80m refinancing deal with the Royal Bank of Scotland.

The deal, led by RBS Corporate Banking team in Manchester, involves a term loan and a revolving credit facility.

The £45m loan will be used to repay a debenture bond taken out in 1995, while the revolving credit facility will be used to fund a number of new developments on the campus, including new sports facilities.

Vice Chancellor Professor Paul Wellings said the refinancing would give Lancaster greater flexibility to pursue its strategic plan. 

“This will give Lancaster opportunities to invest further in exciting new projects to improve the student experience, boost research and maintain excellent teaching,” said Prof Wellings.

Director of finance, Sarah Randall-Paley, stressed that the timing of the deal was crucial. She said: “Rates of interest are currently low, much lower than when the University issued its bond 14 years ago so it makes sense for Lancaster to make an arrangement which will result in both better terms and in greater flexibility to realise its strategic objectives.”

The university has invested more than £300m in its campus over the last five years. Key developments include new academic and student social facilities, improved teaching spaces and one of the largest student residences project in the UK with 3,385 new rooms.

Its next phase of developments includes new facilities for the university’s Institute of Contemporary Arts and its School of Health & Medicine, plus the creation of a new sports hall and other sporting facilities. The plans also include a further development and expansion of Lancaster University Management School.       

The university was advised by KPMG Corporate Finance’s debt advisory team. Jacqui Hulme and Steve Lewis from the RBS Corporate Banking team in
Manchester provided the new £80m financing package.

Jacqui Hulme, Relationship Director at RBS Corporate Banking, said: “The university’s management team impressed us with their future plans for the development of the campus and secured the bank’s backing as a result of this.

“Lancaster is already one of the leading universities in the North West and these new developments will further enhance its reputation.”