Qatar is planning to tap the debt market in the first quarter for about $9 billion to finance its budget deficit, people familiar with the matter said.

Government officials are in talks with a number of international banks about the sale, the people said, asking not to be identified because the talks are private. The bond is likely to be in line with or more than Qatar’s last issuance of $9 billion in 2016, some of the people said. A final decision hasn’t been made and the talks may not result in a sale, the people said.

Qatar, whose debt carries the fourth-highest investment grade at S&P Global Ratings, expects its budget deficit to shrink this year as the economy absorbs the impact of a Saudi-led boycott. Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic relations and closed transport routes with the country in June, accusing it of funding terrorism, a charge it denies.

Qatar’s government communications office didn’t immediately respond to requests for comment. A spokesman for Qatar National Bank, the biggest bank in the Middle East by assets, said it “is expected to be part of any sovereign deal.”

Oil-exporting countries across the Gulf Cooperation Council region are tapping debt markets to bolster public finances after crude prices slumped. Saudi Arabia’s issuance led regional sales last year, raising $21.5 billion, followed by Abu Dhabi’s $10 billion offering and Kuwait’s $8 billion issue, according to data compiled by Bloomberg.

Saudi Arabia and Abu Dhabi are also in discussions with banks to sell bonds in international capital markets during the first quarter of 2018, people familiar with the matter said on Thursday. Oman this week raised $6.5 billion from a bond offering as the Middle East’s biggest non-OPEC producer seeks to bridge a budget deficit.

Source:
courtesy of BLOOMBERG

by Archana Narayanan , Mohammed Sergie , and Dinesh Nair

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