Scottish Government handed same credit rating as UK ahead of bonds plan

The Scottish Government has been given the same credit rating as the UK, as it plans to issue its first financial bonds.

Moody’s rated the Scottish Government as Aa3 while S&P Global rated it as AA, both identical to the UK’s sovereign rating.

Ministers in Edinburgh say that being able to issue bonds will allow further funding of infrastructure investment.

Finance Secretary Shona Robison said: “This is an excellent result – on a level with the UK’s sovereign rating and better than many major industrial countries – which reflects our strong track record of prudent fiscal policy and responsible debt and financial management.

“High credit ratings will support our wider efforts to boost economic growth by providing one of the clearest signals that Scotland is a place to invest in and do business.

“The credit ratings will also support plans for a future Scottish Government bond issuance.”

First Minister John Swinney is expected to issue a further update on the Scottish Government’s plans for issuing bonds on Thursday.

In 2023, the then-first minister, Humza Yousaf, commissioned initial work with the goal of issuing bonds before the end of the current Scottish Parliament session.

Bonds are the standard form of borrowing for governments and often support spending on infrastructure projects.

The Scottish Government’s plans have been nicknamed “kilts” – a play on the word gilt, which refers to bonds issued by the UK Government.

Giving its AA rating, S&P Global said: “As a devolved nation, the Scottish Government (Scotland) operates within a stable and predictable institutional framework that provides strong oversight and well-defined arrangements with the UK central government.

“We think that Scotland’s economy is strong, with high GDP per capita in an international comparison.

“We project Scotland’s prudent financial planning, and the UK central government’s balanced budget requirement will support strong fiscal performance and help sustain very low debt levels.”