The Scottish Government is on track to issue its first bonds in
2026/27, First Minister has announced after
international ratings agencies set a credit rating matching the
UK and better than other major industrial nations.
The issuance will be the first in a £1.5 billion bond programme
over the life of the next parliament, subject to the outcome of
the Scottish Parliament election, in-year borrowing requirements
and market conditions.
Credit rating agencies Moody's and S&P Global have each rated
the Scottish Government the same level as the UK Government – and
above several major European and global economies such as Spain,
Italy and Japan.
First Minister said:
“The Scottish Government's high credit ratings are testament to
Scotland's strong institutions, track record of responsible
fiscal management and pro-business environment.
“We are therefore now on track to commence the bond programme
from 2026/27, with the proceeds used to fund capital investment
in key infrastructure.
“This is about using the powers we have to borrow better – not
more – and reflects the maturity of Scotland's public finances
after more than 25 years of devolution.
“And, it is the latest step in building the institutions and
tools Scotland needs for a prosperous future where our country
takes responsibility for its own decisions.
“Whilst specific issuance plans will be subject to market
conditions closer to the time, we will shortly commence
engagement with banks to act as joint lead managers to enable the
next Scottish Government to proceed without delay.”
In 2023 the Scottish Government's Investor Panel recommended
making bonds available to market as a means of raising Scotland's
profile and attracting investment.
, Chairman of financial
advisory firm Noble and Co, and former co-chair of the Investor
Panel, said:
“I am greatly encouraged by the progress the Scottish Government
is making in achieving a credit rating to raise Scotland's
profile in the international capital markets. This is a positive
step forward and demonstrates they are
serious about becoming a more
investor friendly destination.”
Background
Outline Business case.
Scottish Government credit
rating matches UK.
Bonds are a standard form of borrowing for governments around the
world and support spending including on major infrastructure
projects, with buyers owed the value of the bond plus interest
over a specific period of time.
The Scotland Act 2016 devolved powers to Scotland to allow the
issuing of government bonds for capital investment.
All proceeds from a future bond issuance would be used
exclusively for capital investment in line with the capital
borrowing powers outlined in the Fiscal Framework agreement
between the Scottish and UK Governments.
The Scottish Government is being advised by EY.
