DFSED-SG Bond Bookrunners

The Scottish Government has appointed nine external service providers to assist in accessing the sterling public bond market. From 2016, the Scottish Government’s annual limit for Capital Borrowing has been GBP 450 million, with a cumulative limit of GBP 3 billion.

The 2023 Fiscal Framework review increased these limits in line with inflation, and the Scottish Government has been reviewing its capital borrowing policy options under these new limits. On 4 December 2024, the Scottish Government published a memorandum detailing the outcome of the initial due diligence and its updated capital borrowing policy in the context of the revised Fiscal Framework limits.

The key objectives for the issuance of bonds includes diversifying capital funding sources, enhancing fiscal sustainability, raising Scotland’s profile among financial investors, and developing institutional fiscal discipline. On 12th November 2025 Moody’s Investors Service and Standard & Poor’s assigned inaugural credit ratings for the Scottish Government of Aa3/AA respectively, both with a stable outlook.

The strength and diversity of Scotland’s economy, its strong institutional framework, as well as the Scottish Government’s prudent financial management and low levels of debt are factors highlighted in the agencies’ reports. A GBP 1.5 billion programme is expected to commence over the next parliament, with a debut benchmark bond issuance currently anticipated for late 2026 or early 2027, subject to the outcome of the Scottish Parliament election, in-year borrowing requirements and market conditions.

The Scottish Government has established a multi-supplier Framework Agreement with a duration of four years to cover multiple debt issuance. The framework will include nine banks, each with the opportunity to act as Lead Manager for any future bond issuance.

The top four ranked tenderers will act as Lead Manager on the inaugural bond issuance. While this requirement was exempt from the Public Contracts (Scotland) Regulations 2015 under Regulation 11(1)(f) and excluded from the scope of the Procurement Reform (Scotland) Act 2014 under Section 4, the Scottish Government conducted the procurement in accordance with the principles set out in the Scottish Procurement Policy Handbook.

Throughout the procurement process, consideration was given to: - Achieving Value for Money (VfM) - Ensuring transparency, fairness and accountability - Compliance with internal procurement policies and financial regulations The framework value of 5milllion GBP represents the maximum aggregate value of call-off contracts over the duration of the framework / bond programme and is expected to cover multiple bond issuances if required. Fees payable in relation to individual issuances are commercially sensitive and will not be disclosed.