Scotland bonds: bridge to independence or road to ruin?

The GlobalCapital Podcast

◆ Scottish government puzzles bond market with debt plan
◆ Saudi sov wealth fund makes sukuk debut as crisis in Middle East deepens
◆ Supranational hybrids and other highlights from the IMF/World Bank Annual Meetings in Marrakech
Scotland's first minister Humza Yousaf caught the attention of the bond market this week by revealing plans for the country's first sovereign issue. The plans are vague and he has given himself until May 2026 to price one, so we cast our net far and wide to see what the market thought of the idea and whether it's prudent policy or political posturing.

As GlobalCapital said would happen last week, there was debt issuance from the Middle East, despite the escalation in fighting between Israel and Hamas. It was a landmark trade too: Saudi Arabia's Public Investment Fund's debut sukuk. We assess how it went and what comes next, if anything, for emerging market bond issuers.
Scotland's plans for sovereign bonds, or Kilts as we're calling them, may have been eye catching but they're not the only innovation in the SSA market at the moment. Far more concrete an idea — and with far greater consequences for the market at large, and development finance generally — is hybrid capital from supranationals.
They were a hot topic at the IMF/World Bank Annual Meetings in Marrakech last week, from which our team has just returned to share the most important discussions that took place from development bank capital, to Morocco's earthquake recovery to the impact of war in the Middle East and more.