Investing in Kilts

MeteredOut

"The Scottish government is "on track" to issue its first ever bonds in the next financial year, according to the first minister."

https://www.bbc.co.uk/news/articles/cj97dw17k3do

There's been quite a bit of talk on these boards recently about investing in gilts (and guilts) as a defensive investment option, so thought this was interesting. It's not clear to me why someone would invest in these rather than the UK variety.

flaneurs_lobster

There's nothing underneath this story.

tetrarch

Properly valued you should be paying a premium to issue these bonds versus the UK government. I am willing to bet that the novelty and a proper marketing campaign will actually lead to these trading inside UK bonds

Regards

Tet

MeteredOut

flaneurs_lobster said:

There's nothing underneath this story.

   

eskbanker

MeteredOut said:

It's not clear to me why someone would invest in these rather than the UK variety.

Nationalism would probably be a factor for many, although no wish to deflect a thread into political territory....

MeteredOut

eskbanker said:

MeteredOut said:

It's not clear to me why someone would invest in these rather than the UK variety.

Nationalism would probably be a factor for many, although no wish to deflect a thread into political territory....

Yes, I did think of that too. I meant more from a purely financial standpoint.

Since they're being nicknamed kilts, I wonder if that means they'll get a little more exposure, but at least they should provide good cover for people assets.

aroominyork

They would be in direct competition with gilts and, even if they had the same AA credit rating, they would be seen as the slightly riskier option. I expect they would offer a slightly higher yield than gilts so could be an attractive investment. 

artyboy

flaneurs_lobster said:

There's nothing underneath this story.

Ooooh, I dunno though!

Middle_of_the_Road

MeteredOut said:

"The Scottish government is "on track" to issue its first ever bonds in the next financial year, according to the first minister."

https://www.bbc.co.uk/news/articles/cj97dw17k3do

There's been quite a bit of talk on these boards recently about investing in gilts (and guilts) as a defensive investment option, so thought this was interesting. It's not clear to me why someone would invest in these rather than the UK variety.

That would be skirting around the issue 🙂

poseidon1

eskbanker said:

MeteredOut said:

It's not clear to me why someone would invest in these rather than the UK variety.

Nationalism would probably be a factor for many, although no wish to deflect a thread into political territory....

Not in my case. I would invest if they are priced to give a slightly higher yield than a UK equivalent ( which was inferred in the FT article I read).. 

If eurobonds offered better yields and were more easily traded here at lower nominals, they would also warrant my consideration.

Investments are investments, and having yet another fixed income option is good thing in my opinion. I hope they get it off the ground, and retail investors can access easily.

david72

I can see that some people who live in Scotland might want to consider investing in these bonds, to help fund infrastructure in Scotland itself, and possibly members of the Scottish diaspora, or of Scottish descent, worldwide might also feel minded to do so (they often seem to have a somewhat rose-tinted attachment to "the auld country"!).

I suppose the big question from the general public perspective is whether the major fund platforms will decide to create funds to easily allow investment in these bonds (eg, equivalents to VGOV, etc) or to include them in existing UK/European/global bond funds, or whether they will generally really only be accessible to institutional investors in practice?