Scotland's credit rating matches UK ahead of first bonds issue

The Scottish Government’s credit rating is the same as the UK’s ahead of its first financial bonds issue.

The SNP administration aims to issue the bonds in 2026-27 as part of a £1.5bn programme over the life of the next parliament if it wins the upcoming election.

The move is aimed at raising funds for infrastructure projects.

Ahead of the launch, two credit agencies have given the Scottish Government the same rating as the UK Government.

For Moody’s, this grading is Aa3, and for competitors S&P Global it is AA.

The levels put it above those of countries including Italy, Japan and Spain.

Appearing on BBC Radio Scotland, finance secretary Shona Robison said the rating recognises the existing “strong institutional framework and the prudent financial management of the Scottish Government”.

She went on: “This is about creating a gateway on the global stage to encourage investment here in Scotland and this will very much persuade investors that Scotland is a safe bet in order to invest here and that will be good for our economy.”

As well as the election result, the bonds programme is subject to in-year borrowing requirements and market conditions. Finance giant EY is advising ministers.

First Minister John Swinney commented: “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.”

The issue of bonds was recommended by the Scottish Government’s investor panel in 2023.

Former panel co-chair Angus Macpherson, who chairs financial advisory firm Noble and Co, 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.”