Assured Guaranty (Europe) Ltd. (AGE) has announced that it has guaranteed principal and interest payments on approximately £98 million par of bonds, issued by Uliving to refinance student halls of residence at the University of Essex Colchester campus in UK. As a result of the guarantee, the bonds are rated AA by S&P.

The publicly listed, 42-year bond priced on 22 February 2017 taking advantage of the current low long term real rates by issuing at a negative real yield (prior to factoring in inflation).

The sponsor, Uliving, was established in 2009 to develop student accommodation projects in partnership with universities. The bonds will refinance a project that has been operational since 2013 and consists of two buildings on the University’s Colchester campus, providing a total of 1,429 student rooms.

Bouygues Development, Derwent Living and Equitix are the equity providers for the scheme.

As the financial guarantor, AGE guarantees timely payment of scheduled principal and interest to bondholders throughout the life of the bond, in accordance with the terms of its financial guarantee.

Assured Guaranty closed a similar transaction for the University of London at the end of December.

Dominic Nathan, Managing Director, AGE, commented:

"We are now seeing a stronger flow of refinancing opportunities like this one, across various sectors and PFI projects, because of the current low interest rate environment, coupled with the increased number of investors choosing to invest in longer maturities in order to match their liabilities. These are excellent conditions to refinance with a wrapped bond and reduce the cost of debt.”

Nick Proud, Chief Executive, AGE, commented:

“There is strong demand from investors for highly rated infrastructure bonds as a direct result of Solvency II. In this transaction, as with others we have closed, a wrap proved to be the most cost-effective solution to deliver this refinancing."