A pioneering bond issue has raised £370million for major civic building projects in a “huge” success for Aberdeen.
The first such foray into the capital markets by any local authority in Scotland attracted better-than-expected interest.
Investors snapped up the state-backed finance package, which will help pay for a new exhibition and conference centre, schools, homes and transport links.
Council leader Jenny Laing hailed it as a “remarkable achievement” and a vote of confidence in the Granite City’s finances.
It was also applauded by opposition parties, with Conservative MSP Ross Thomson saying it could be a “game changer” and SNP opposition leader Stephen Flynn calling it “very positive”.
Aberdeen was able to launch the unprecedented municipal bond issue after securing a credit rating – another first for a Scottish council.
Leading agency Moody’s last month gave the authority a score of Aa2.
The injection of capital will go towards a planned £1billion package of improvements over the next 15 years.
Councillor Laing said: “This is a remarkable achievement by this administration in securing this investment in the future of our city.
“Having already secured a credit rating, the issue of the bond sees another step forward by the council in delivering a stable and fiscally prudent financial strategy that is both affordable and sustainable for the future as now demonstrated by investor confidence today.”
The Scottish Government has encouraged councils to look at the potential for part-funding significant projects via the markets.
Mr Flynn said: “On the face of it, it is obviously a very positive thing, which shows the confidence that investors have not only in Aberdeen but in the wider Scottish economy.”
Finance convener Willie Young said the target for the bond was exceeded within four hours of its issue at 8.30am.
“This is huge for the city,” he said.
“It exceeded expectations. We went for a specific number – we got more than we asked for.
“It means the UK sees Aberdeen as viable for business.
“It should give confidence to the private sector that the city is able to do business. It should allow business to go forward with confidence.
Mr Thomson, who represents the north-east in the Scottish Parliament, said: “This should be taken as a strong vote of confidence in the resilience of the local economy here in Aberdeen.
“This really could be a game-changer in terms of funding the type of infrastructure we need to secure Aberdeen’s position as a global energy city.
“Given the chronic lack of support from the Scottish Government, the council administration has been forced to come up with innovative ways to raise income and I think that we could well see other local authorities across the country now follow suit.”
