Oman is considering raising a loan of as much as $2 billion, two people familiar with the plans said, just weeks after the Middle East’s biggest non-OPEC producer sold $6.5 billion of bonds.
The government is in talks with international banks about pricing for the loan, the people said, asking not to be identified because the talks are private. Discussions are preliminary and may not result in a deal, they said. Repeated calls to Oman’s Ministry of Finance weren’t answered.
Oman became the first Gulf Cooperation Council country to tap international capital markets this year to bridge a budget deficit brought on by lower oil prices.
Its neighbours are expected to follow. Kuwait, Saudi Arabia and Abu Dhabi are planning to sell bonds, according to people familiar with the matter. Saudi Arabia is also said to be seeking to increase a $10 billion sovereign loan by $2.5 billion.
The country last year raised $7 billion from two bond sales as it sought to bridge a budget deficit brought on by lower oil prices. The sultanate expects to sell $7.5 billion in 2018 to help meet spending requirements. That will push the ratio of government debt to economic output to 50.8 percent from 15.3 percent in 2015, according to data from the International Monetary Fund.
Oman’s sovereign wealth fund plans to start a $1 billion infrastructure fund to boost investment in projects including road, transport and energy systems, people familiar with the matter said this month. The State General Reserve Fund is talking to international banks and potential investors for the financing.
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