Bonds announcement a ‘proud day for Scotland’, says Swinney

The announcement of plans to issue Scottish Government bonds is a “very proud day for Scotland”, the First Minister has said.

John Swinney said on Thursday his Government will begin issuing bonds next year in a bid to attract investment for “key infrastructure” projects.

But he was unable to say what the extra funding would go towards, telling the PA news agency capital plans would be outlined in January.

It came after two global agencies gave Scotland the same credit rating as the UK, with Moody’s awarding a AA and Aa3 coming from S&P Global.

The First Minister told PA on Thursday: “This is a very proud day for Scotland, because we’ve achieved the best possible credit ratings we could within the United Kingdom from two of the world’s leading credit rating agencies, Moody’s and Standard and Poor’s.

“That’s a reflection of the economic strength of Scotland, the strength of our financial management, and the strength of the financial institutions within Scotland, and it gives us a really strong foundation for the issuing of a bond up to a value of £1.5 billion in the next parliamentary term, over a number of years, which can underpin investment in the capital programme of Scotland.”

The bond issuance – which would allow investors to buy Scottish Government debt – would provide “another option” for the country to attract investment, the First Minister said.

While he said housing and the drive to net zero could benefit from the bonds, the First Minister would not go further on specific programmes which would be financed.

“The Government will set out in the investment programme in January exactly the projects that we’re taking forward over the course of the next few years,” he said.

“But obviously we need to have the funds to underpin that programme and what the announcement overnight from the credit rating agencies demonstrates is that Scotland has every potential to attract investment on international financial markets and that we can use those resources to support our capital programme.”

Specific plans for the issuance of bonds, the First Minister said, will be subject to market conditions at the time.

Former first minister Humza Yousaf in 2023 commissioned initial work with the goal of issuing bonds before the end of the current Scottish Parliament session.

That came after advisers in the Scottish Government’s investor panel recommended making bonds available to the 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 he was “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”.

Mr Macpherson added: This is a positive step forward and demonstrates they are serious about becoming a more investor friendly destination.”

Scottish Finance Secretary Shona Robison said the credit ratings would be “absolutely fundamental to increasing investor engagement in Scotland”.

She also insisted the “firm foundations” of Scotland’s economy would be in place “in whatever constitutional arrangements we have in the future”.

Speaking on BBC Radio Scotland, she added: “Any transition to Scotland becoming an independent country would be carefully managed to uphold that investor confidence, protecting Scotland’s public finances and to support long-term economic prosperity.”