Wellcome Trust issues 'first' long-term charity euro bonds

The foundation is hoping to borrow €400m, which will return 1.125 per cent of the initial investment each year to 2027

Wellcome Trust
Wellcome Trust

The Wellcome Trust is hoping to borrow €400m (£307m) from a range of investors through what it says is the first issue of long-term euro debt by a charity.

The health research charity’s bonds are due in 2027 and have a final coupon of 1.125 per cent. This means that, until 2027, an investor will be paid 1.125 per cent of the value of their initial investment each year, and will then have their initial payment returned in 2027.

According to an article today in The Times newspaper, the bond issue is oversubscribed by seven and a half times because investors fear deflation in the eurozone.

The Wellcome Trust also issued pound sterling bonds in 2006 – it said at the time it was the first UK charity to do so – and again in 2009 and 2014, worth a combined total of £975m.

A statement from Danny Truell, chief investment officer of the trust, said: "These bonds represent our inaugural issuance in euros and we are delighted to be able to extend access to our strong balance sheet to a broader investor base.

"We believe we are the first independent charity to issue long-term euro debt, and it is testament to the strength of our financial position that we have seen such strong demand for these bonds."

The charity’s recently published accounts for the year to 30 September 2014 show that the total value of the trust’s funds rose by £1.7bn to £16.7bn over the year. The Wellcome Trust is, after the Bill & Melinda Gates Foundation, the world’s second-biggest foundation.

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