The Wellcome Trust has announced that it is hoping to raise €400m (£307m) from the European investment market.
It believes that the issue of €400m (£307m) worth of bonds makes it the first independent charity to issue long-term euro debt.
The bonds will be due in 2027 with a final coupon code of 1.125 per cent. Investors will receive 1.125 per cent of their investment each year until 2027.
According to the trust, the coupon rate is the lowest ever for an Aaa/AAA-rated corporate in the euro bond market and the lowest ever coupon in the euro bond market for a corporate issuance with a tenure of longer than ten years.
The initial order book was seven and a half times over-subscribed.
The global charitable foundation was the first British charity to issue pound sterling bonds in 2006. Further bonds were issued in 2009 and 2014, worth a combined total of £975m. This will be the trust’s first venture into the euro bond market.
The Wellcome Trust currently holds an investment portfolio valued in excess of £18bn and spends approximately £700m a year on charitable activities, funding mostly medical research.
Returns on the trust’s investment portfolio have totalled 75 per cent over the last five years. In the year ending September 2014, the portfolio delivered returns of 15 per cent, representing gains of £2.5bn.
The latest bonds will be jointly managed by the Bank of America Merrill Lynch, J.P. Morgan and Morgan Stanley.
Danny Truell, chief investment officer of the Wellcome 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.
“We are grateful to the many institutions who intend to entrust us with their money. It has been our strategy to review market conditions regularly and to access the bond markets when circumstances are appropriate. We are pleased to be able to include the euro bond market in this ongoing assessment of opportunities for the trust.”
