Oman has hired a group of international banks including HSBC and Standard Chartered for a planned bond issue which could go up to $2bn in size, sources familiar with the matter said.
The government has been preparing the debt sale for quite some time and last month sources told Reuters the deal was almost ready.
Oman’s bond would be the country’s first international issuance of 2019, and will be seen by many as a test of its ability to access external funding after Moody’s downgraded it to junk earlier this year – the last international rating agency to do so.
Oman has mandated a group of banks including JPMorgan, HSBC, Standard Chartered and First Abu Dhabi Bank for its planned deal, said the sources.
Oman’s ministry of finance and First Abu Dhabi Bank did not respond to a request for comment, while the other banks declined to comment.
The finances of the Gulf producer have been depleted by a slump in oil prices over the past few years, leading the government to rely on external funding – through bonds and loans – to refill its coffers, while it tried to implement fiscal reforms to tame a widening budget deficit.
S&P Global Ratings last month cut its outlook on Oman to negative from stable, saying the change reflected “the risk that in the absence of substantial fiscal measures to curtail the government deficit, or a more favourable external environment, fiscal and external buffers will continue to erode.”