The Wellcome Trust has announced it is issuing bonds worth £400m.

The trust is the UK’s largest charitable foundation, with an investment portfolio of £17.3bn. It spends around £700m a year on charitable activities, chiefly funding medical research.

The Wellcome Trust bond matures in 2059, and will pay a fixed amount more than government bonds – expected to be 4 per cent a year.

The bond issue was three and a half times oversubscribed.

The trust was the first UK charity to issue bonds, issuing £300m in 2006 and another £275m in 2009. Funds raised from the bond issue were invested in other, higher-yielding assets.

Danny Truell, chief investment officer of the Wellcome Trust, said: “It has been our widely publicised strategy to regularly review market conditions and to access the bond markets when circumstances are appropriate.

“We understand that not many issuers are granted the opportunity to borrow money for this long, particularly at the cost of funding that we have secured.

“It is testament to the strength of our financial position that we have seen such strong demand for this bond and are grateful to the many institutions who intend to entrust us with their money.”

A bond is an investment product which pays an agreed level of interest each year for an agreed period of time, and then repays the original amount paid for it at the end of that period.