The Scottish Government has appointed nine banks to a new framework that will support the delivery of its £1.5 billion bonds programme over the next five years, marking a significant step towards its inaugural bond issuance.
As part of the framework, HSBC Bank Plc, Merrill Lynch International, NatWest Markets Plc and RBC Europe Limited have been selected as joint bookrunners, acting as lead managers for the Scottish Government’s first bond sale. The remaining banks on the framework will have the opportunity to support future bond issuances.
Law firm Clifford Chance LLP has also been appointed as legal adviser to support the inaugural issue.
The move follows the Scottish Government securing the same high credit rating as the UK last year, strengthening preparations for the launch of the programme.
Deputy First Minister Jenny Gilruth said: “This new framework will play an important role in supporting the delivery of the Scottish Government’s bond programme, bringing together a range of market expertise.
“The funding raised from these bonds will help support delivery of the capital infrastructure projects outlined in the Spending Review, while allowing the Scottish Government to diversify its borrowing. Bonds are a standard form of borrowing for governments around the world.
“The Scottish Government’s bond programme is underpinned by high investment grade credit ratings from two global credit rating agencies. These are an endorsement of the strength of the Scottish economy and efforts we are making to drive that forward.”
The full framework includes Banco Santander, Barclays Bank Plc, Citigroup Global Markets Limited, Deutsche Bank AG, HSBC Bank Plc, Merrill Lynch International, NatWest Markets Plc, RBC Europe Limited and Standard Chartered Bank.
The Scotland Act 2016 devolved powers allowing the Scottish Government to issue bonds to fund capital investment. In 2023, the Scottish Government’s Investor Panel recommended introducing bonds to the market to raise Scotland’s profile and attract investment.
Lead managers are responsible for arranging and executing bond issuances, including engaging with investors and managing the bond sale process.
The Scottish Government confirmed that all proceeds from future bond issuances will be used exclusively for capital investment, in line with the capital borrowing powers set out in the Fiscal Framework agreement between the Scottish and UK Governments.
Professional services firm EY is advising the Scottish Government on the programme.
Next steps on bonds plan – gov.scot
