Wellington, Oct 9 NZPA - The University of Canterbury is scoring a first in the area of finance in a plan to raise up to $100 million to fund capital projects.

The university, run by former Reserve Bank of New Zealand deputy governor Rod Carr, said the bond sale was the first by a New Zealand tertiary institution and had a philanthropic option.

"We owe it to our children and grandchildren to do all we can to stop what I fear could become the great brain robbery," Dr Carr, who is vice chancellor, said.

Investors can support higher education in New Zealand by opting to reduce the interest rate to zero for some, or all of their bonds, and can donate some, or all, of the sum owed on maturity.

The university is selling $50m of 10 year fixed-rate bonds with an option to accept $50m of over subscriptions.

The bonds pay 7.25 percent for the first five years and reset for a further five years. They mature in 2019.

Murray and Company and First NZ Capital are joint lead managers. The offer opens today and closes on November 30.

"The optional philanthropic element of the bond issue will allow investors to direct their support to higher education while tailoring their contribution in light of their own circumstances, which may change over the term of the bond," said Dr Carr.

He said the university needed to invest $500m in buildings and other infrastructure in the next 10 years.

He expected the university's vision of people prepared to make a difference to appeal to those seeking an investment that provided more than what had traditionally been available to investors.