What difference could bonds make to funding a future Scotland?

Bonds used to be printed on card and the British government put a gold-coloured border on each one, which is why they became known as 'gilts'.

Scotland is aiming to have 'kilts', though it won't have to issue pleated documents with a sporran, as these days they're electronic.

The plan is to issue them for capital spending - much of it on housing, roads, schools and hospital buildings.

It wouldn't look any different or make it possible to borrow more. The same limits would apply, imposed by the UK Treasury, as apply to borrowing through the UK's National Loans Fund which has been used previously.

Some borrowing would not be allowed through bonds. The capital borrowing limit is nearly £500m this year.

Issuing bonds is a normal activity for governments at many levels around the world.

In the US, states, cities and private road companies sell them. Private companies can issue bonds instead of going to banks for a loan.

As with your personal credit rating based on your financial history, a rating provides an indication for investors and lenders of how reliable the borrower is for repayment.

The surest bet for repayment has been a US Treasury bond, with UK gilts not far behind.

A developed economy with control of its currency does not default, though ratings can be cut slightly if there is political instability leading to budget uncertainty. Britain's credit rating was cut soon after the Brexit referendum.

The credit ratings agencies don't always get their judgements right and were criticised for failing to reflect the underlying problems with banks ahead of the 2008 financial crunch.

They were criticised after that for having a conflict of interest - the borrower pays them to make that rating judgement.

What affects a country's credit rating?

Two of the credit ratings agencies - Moody's and Standard & Poor - have now made similar judgements that the Scottish government is as good a lending bet as the UK government.

They both reflect on the balanced budgets and relatively small debts at Holyrood, though they seem less aware that both are constraints imposed by the UK Treasury. Constraints Scottish ministers would prefer not to have.

They also indicate what might make ratings go up or down.

A change in the UK government rating, for instance, or failure to get to grips with the demographic challenge of rising health and social care costs facing Scotland.

And if there were moves towards independence, that would mean uncertainty and the potential for financial instability. So there would be downward pressure on ratings, implying that it would become more expensive to borrow.

Are bonds the best way to borrow money?

The Scottish government has previously said there could be circumstances where it's cheaper to borrow by issuing bonds than going through the National Loan Fund. But higher costs look more likely.

So far, the Scottish government is taking advice from accountants EY and is now engaging banks to act as brokers. It will need specialist lawyers.

The costs mount up when compared with the cost of using the National Loans Fund, in which Scottish government and local authority borrowing is bundled up in the UK's management of debt and regular bond issuance.

A further additional cost of bonds is something called the liquidity premium.

That is the increased risk to an investor of not finding a buyer if an investor wants to sell on the bonds they have bought. Bonds issued by smaller countries, in small quantities, carry more of that risk.

But the argument made by Scottish ministers is that there may be benefits that could outweigh the extra costs, and those benefits are attracting investors into Scotland and engaging with them about Scotland as a place to invest further.

The route to independence would also be smoothed by such relationships being developed and matured, rather than having to launch into issuing bonds on day one of independence when there would likely be questions about financial stability.

The Finance Secretary, Shona Robison, appeared to argue on BBC Radio Scotland that the new credit rating applies to the whole Scottish economy.

It does not. It's all about the Scottish government. Other investments, in property, companies or windfarms, have their own risk profiles and credit ratings.