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DUBAI, Oct 19 (Reuters) - Oman is planning its first
international bond sale of the year and has begun discussions
with certain Gulf countries for financial support, documents
showed on Monday, as it seeks to shore up its fragile finances.
With a growing pile of debt and a sluggish pace of reforms,
the small oil producer is seeking to plug its yawning deficit as
revenues have suffered the double blow of weak oil prices and
the coronavirus crisis.
The planned bond sale will comprise three tranches with
maturities of three, seven and 12 years.
Oman has begun talks with some Gulf countries for financial
support, according to a bond prospectus dated Oct. 19.
"Whilst discussions in relation to financial support have
commenced with certain other Gulf countries, such discussions
are only in preliminary stages," according to the prospectus,
which was seen by Reuters.
The Omani government did not immediately respond to a
request for comment.
Oman has budgeted for a deficit of 14.1% of gross domestic
product in 2020 due to lower prices, with its debt-to-GDP ratio
expected to increase to 79% by the end of the year, according to
the prospectus. The 2020 budget assumes an oil breakeven price
of $82 per barrel.
"The emergence of COVID-19 poses a new risk to the fiscal
position of Oman and has already led to significant volatility
in financial markets, lower oil prices, reduced global liquidity
and the expectation of lower economic growth both regionally and
globally, which will, in turn, affect Oman, for the most part
negatively," the prospectus said.
Oman hired Bank Muscat, Citi, First Abu
Dhabi Bank, HSBC, Natixis, Societe
Generale and Standard Chartered to arrange
investor calls ahead of the planned debt issuance, a document
from one of the banks arranging the deal showed.
The deal will be of benchmark size, which generally means
$500 million at least per tranche.
(Reporting by Yousef Saba, Saeed Azhar, Davide Barbuscia;
Editing by Alison Williams and Bernadette Baum)
