For the first time in its 800- year history, Cambridge University is planning to issue bonds to raise money from the markets, a varsity official said.

The university is considering turning to the bond market in a bid to raise £ 400 million to fund two of its capital projects —— to develop its residential and research facilities, The Times reported.

Andrew Reid, the university’s Finance Director, has admitted he was worried by the step into the relative unknown but insisted that it was the best way to secure the huge sums of money required for two one-off building projects.

“We usually raise money through benefactors but this time we need a significant sum, so are turning to other methods. At the moment we are completely unleveraged. It worries me. But we are a very stable organisation and we need to manage our finances properly.

“We remain open to bank financing, private placement or public bonds but the value of funding we anticipate needing, and the term (we are looking at, of 30 to 40 years) suggests that a bond issue is likely to be the best way forward,” he told the British newspaper.

The university’s recourse to the bond market, a trend set by some institutions in the United States, suggests not so much penury —— its investment assets as a whole are currently valued at about £ 4 billion pounds.

Several American universities have issued new bonds in the past one year after market losses in their portfolios severely dented the value of their investments. And, Lancaster University was the first in the U.K. to go for a bond in 1995 with a £-35-million issue.