Scottish Government to issue first bonds after receiving credit rating update, as independence warning given

Finance Secretary Shona Robison has described Scotland as a “safe bet” for investors as the Scottish Government prepares to issue its first financial bonds. The Scottish Government has been given the same credit rating as the UK. Credit rating company Mood’s gave the Government an Aa3 rating and S&P Global rated it as AA. Ms Robison told the BBC: “This focuses on the Scottish economy and the Scottish Government’s financial stewardship and Scotland’s ability to be a safe bet for investors. “It’s creating a gateway on a global stage to encourage investment in Scotland and persuade investors that Scotland is a safe place to invest, and that is good for our economy.” The Government wants to issue bonds which will allow it to borrow money from investors, who will receive regular interest payments in return. This will raise money for infrastructure projects. First thing Monday to Friday, The Steamie newsletter bring you the best political news and analysis Moody’s praised the Scottish Government’s “prudent fiscal management” and the country’s economic stability. S&P Global said the Scottish economy was “strong” and operating “within a stable and predictable institutional framework that provides strong oversight and well-defined arrangements with the UK central government”. However, both agencies said their ratings could be cut if Scotland becomes independent. Ms Robison said: “Two global credit rating agencies have rated Scotland the same as the UK and better than Spain, Italy and Japan, and points to the strength of our economy, the strong institutional framework and the prudent financial management of the Scottish Government.” The Scottish Government has had the power to issue bonds since 2014. However, it has instead borrowed money from the UK national loan fund, which is seen as a cheaper way to raise money. Bonds could offer better value for money under certain circumstances and greater flexibility. The Scottish bonds are being nicknamed “kilts” - a play on the word gilt which refers to the bonds issued by the UK government. The Scottish Government is allowed to borrow up to £472 million for capital investment over the next year. This would take its capital borrowing to £2,7 billion, close to its legal limit of £3.1bn.