The University of Melbourne and the University of Sydney are now borrowing from capital markets to fund academic researches and campus expansions.

Investors are piling in as these two universities have not borrowed from capital markets in the past.

"Investor demand for these Australian university deals is strong. We've had two come to market and they've been well received, so there may be an opportunity for some of the other big universities to look at issuing as well," Gavin Goodhand, money manager at Altius Asset Management Pty told Bloomberg.

Goodhand administered an impressive A$550 million bond sale.

"It's good for the market that we're seeing increased diversity. Investors would probably jump at the chance to buy if another university came to market," Goodhand added.

University of Melbourne

"The issue was for A$250million on a seven year tenor and attracted extremely strong interest from Australian and Asian investors. The issue takes advantage of current favourable conditions in financial markets and the University's Standard & Poor's AA+ (stable) credit rating (with the issue being similarly rated). The joint lead managers were Australia & New Zealand Banking Group and National Australia Bank" University of Melbourne said in a statement.

Its debentures were sold at 80 basis points, sales managers from Australia & New Zealand Banking Group Ltd. and National Australia Bank Ltd. confirmed in an e-mailed statement obtained by Bloomberg. Initial offering for the university was marketed at a spread of approximately 85 basis points with a minimum size of A$100 million.

The sales acquired will be use to enhance infrastructure and programmes for the university.

"The University of Melbourne has completed its first bond issue to support a range of strategically significant initiatives. It will be used to refinance existing debt on more efficient terms and to finance core, self sustaining projects, such as student housing," the statement from the university reads.

University of Sydney

The University of Sydney amassed A$200 million sales from a 4.75 per cent similar maturity in April.

ANZ and NAB also managed the transaction for the University of Sydney at an 88 basis-points spread over the swap rate.

The university is rated Aa1 by Moody's Investors Service.

According to a statement by Moody's, University of Sydney has established a A$600 million issuance program that will fund future research and education programmes.

The university had also refinanced a A$500 million bank loan maturing in 2016, according to Moody's.

New South Wales universities - Macquarie University and University of Wollongong - were the most recent universities to sell domestic notes.