WIREDGOV

Banks and legal advisers to be appointed.

The Scottish Government is making good progress towards its first bonds issuance in 2026-27, First Minister John Swinney 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 yesterday 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.