Scottish government names bookrunners for first bond issuance (updated)

HSBC Holdings

Today 13:41

Adds background on the bond in paragraphs 4-5, details on Scotland's credit rating in paragraph 7, and other bookrunners in paragraph 8

    LONDON, June 25 (Reuters) - Scotland's government named HSBC, NatWest, RBC and Bank of America-owned Merrill Lynch on Thursday to act as joint bookrunners for its first sale of bonds in recent history due later this financial year.
The programme aims to sell £1.5 billion ($1.97 billion) of debt over the next five years to fund capital infrastructure projects including roads and renewable energy.
"The Scottish Government's bond programme is underpinned by high investment-grade credit ratings from two global credit rating agencies," Deputy First Minister Jenny Gilruth said.
Reuters reported earlier this month that the Scottish government was sounding out investors for the nation's first debt sale since the 17th century.

    Some investors have dubbed the bonds 'kilts', a play on British bonds' nickname 'gilts' and the traditional tartan male clothing from the Scottish Highlands.    
  

    As part of the United Kingdom, Scotland's borrowing needs are financed via British government debt, but the pro-independence Edinburgh government is keen to raise its own funds.
  

    Gilruth said Scotland's investment-grade credit rating was "an endorsement of the strength of the Scottish economy" although 
    S&P Global
     said last year the rating was likely to be cut if Scotland "took material steps toward independence from the UK".
  

    Other banks on the list to assist with future Scottish government bond sales include Santander, Barclays, Citi, Deutsche Bank and Standard Chartered.
  

    All the banks involved are also primary dealers — known as gilt-edged market makers — in British government debt.
  
 ($1 = 0.7601 pounds)

 (Reporting by David Milliken; editing by William James and Muvija M)
 ((david.milliken@thomsonreuters.com; +44 20 7513 4034;))