University raises £70m to develop new business school

The University of Derby has announced it has raised £70 million of funding to develop a new state-of-the-art business school in the city centre.

Following a competitive funding process, the private placement was secured, featuring highly attractive, fixed rate, 35-year terms.

It is the university’s first debt capital markets issuance and was arranged by Centrus, which acted as corporate finance advisor.

The university secured planning permission for the new business school, which will be built on land adjacent to the university’s One Friar Gate Square building, back in May.

Set to open in 2024, it will form a core part of the university’s long-term strategy to create a brand-new city centre campus.

Craig Jones, chief financial and commercial officer at the University of Derby, said: “The new Business School is pivotal to our role as a civic university and the development of our city campus, enhancing the teaching and real-world learning experience for our students and staff.”

The funding for the business school is structured, so half of the funding has already been received, with the remainder due in December this year, to better match the project’s funding needs, while reducing the university’s interest costs.

The funding also incentivises the university’s commitment to social inclusion and equality by providing a discount if the target set by the university for reducing the attainment gap is achieved.

As well as Centrus, the university was assisted by law firm Mills & Reeve.

Mr Jones said: “Centrus and Mills & Reeve provided outstanding support through the process, contributing to the successful outcome achieved.

“We are delighted our new borrowing arrangements link to our inclusion and equality commitments, given these commitments to the university’s strategic agenda.”

Sam Goldman, director at Centrus, said: “It’s been a pleasure to have supported the university to arrange funding so key to their long term-strategy.

“This excellent outcome was achieved against the backdrop of significantly volatile financial markets.

“A key element of the success obtained was a carefully targeted investor and credit positioning strategy, on which we worked closely with the university to develop and implement.

“We see this transaction as part of a broader trend towards universities utilising debt financing for capital projects across the sector.”

Matthew Howling, principal associate at Mills & Reeve, said: “It was a pleasure to work with the university at every step in the transaction, providing help and advice throughout.

“It was also rewarding to work on a project that will have such a positive impact on the university, its students and staff, as well as the wider community in Derby.”