Scottish Government bonds launch planned

FM targets 2026/27 for first national bond.

The Scottish Government is on track to issue its first bonds in 2026/27, First Minister John Swinney 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.

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.

– FIRST MINISTER JOHN SWINNEY

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.

Angus Macpherson, 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.