LEADING bankers have backed Humza Yousaf’s plan to issue Scottish Government bonds.
Bosses at Royal Bank of Scotland, Baillie Gifford and Bank of America – part of a panel convened by the First Minister - have said the move will significantly raise the nation’s profile, encourage relationships with investors and boost the country’s credit rating.
Yousaf described the plan at SNP conference as the party’s “most ambitious proposal yet”, adding he had commissioned initial work including due diligence assessments with the aim of making the bonds available to the international market by the end of the current parliamentary session.
Top economist Richard Murphy said the "bold and brave" step should be "applauded".
It is anticipated the amounts raised would be used to fund infrastructure projects, with further details to be set out in the Budget in December.
Holyrood cannot exceed its £450 million annual borrowing limit and has a ceiling of £3 billion in total.
The Scottish Government has had the power to issue bonds since 2015 but is has never before been utilised.
The issuing of bonds was part of package of recommendations from the panel about how Scotland can attract capital and support its transition to net zero.
Deputy FM Shona Robison welcomed the recommendations and said: “It is important that we consider all means to attract investment and I have asked for due diligence work to begin with the aim of making the bonds available to the market by the end of the current parliamentary session.
“While the UK National Loans Fund provides a cost-effective source of capital borrowing, the structures available are limited to us.
“This is why, after added flexibility was secured through the fiscal framework review, it is the right time to re-assess how we use our borrowing powers.
“I look forward to setting out further detail alongside the Scottish Budget in December.”
Those on the investor panel include Andrew Telfer, senior partner at fund manager Baillie Gifford, Angus Macpherson, the chief executive of merchant bank Noble & Co, Alexandra Basirov, the head of sustainable banking solutions in Europe, Middle East and Africa at Bank of America and Judith Cruickshank, the chairwoman of the Scotland board at RBS.
