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Oman, in talks for Gulf aid, plans three-part bond

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.

Adds details, background

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 BKMB.OM, Citi C.N, First Abu Dhabi Bank FAB.AD, HSBC HSBA.L, Natixis CNAT.PA, Societe Generale SOGN.PA and Standard Chartered STAN.L 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)

((Yousef.Saba@thomsonreuters.com; +971562166204))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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