The Scottish Government is making good progress towards its first
bonds issuance in 2026-27, First Minister has told financial services
firms in London.
Speaking at an event at Scotland House London, the First Minister
announced the next steps for the £1.5 billion bonds programme,
which will provide financing for major capital projects across
Scotland.
Procurement for book runners - the banks to act as joint lead
managers for the bonds - and legal advisers will go live this
week.
The firms selected will support delivery of a £1.5 billion bonds
programme over five years, subject to the outcome of the Scottish
election.
Last year the Scottish Government was given the same high credit
rating as the UK, and better than Spain, Italy and Japan.
The strength and diversity of Scotland's economy, its strong
institutional framework, as well as the Scottish Government's
prudent financial management and low levels of debt were
highlighted in the credit agency reports.
The First Minister said:
“Our intention is to make Scotland the most attractive
destination for investment in the United Kingdom and our bonds
programme is one of the ways we will do that.
“We also want to diversify our sources of borrowing so as to
maximise value for money for Scotland's taxpayers. A Scottish
Government bond issuance will enable us to structure our debt
more effectively – using the powers we have to borrow better, not
more.
“Whilst specific issuance plans will be subject to market
conditions closer to the time, these bonds will raise the
funding needed to support delivery of the capital infrastructure
projects outlined in our recently published Spending Review and
Infrastructure Investment Pipeline.”
Background
Outline Business case.
https://www.gov.scot/news/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. 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.
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.
