The Bahraini government is in talks with banks to raise funds through the sale of benchmark-sized eurobonds later this year.

The international sale of the debt instrument is likely to take place sometime after the summer, according to news agency Reuters, which cited a source familiar with the matter. Benchmark-sized usually refers to at least $500m. Bahrain’s central bank did not immediately respond to a request for comment, the report added.

Governments in the region are queuing up to raise funds from debt capital markets to compensate for shrinking oil revenues and plug budget deficits.

In February, Bahrain, which has been borrowing domestically and abroad, cancelled a $750m sovereign bond sale after ratings agency Standard & Poor’s cut its credit rating. However, in the same month, the country sold $600m of international bonds. In May, it privately placed a $435m, three-year sukuk (Islamic bond) issue.

Oman in June raised $2.5bn through the sale of dual-tranche bonds, while Qatar secured $9bn in a three-tranche bond offering in May. Saudi Arabia is looking to raise as much as $15bn from a bond offering later this year. In April, Riyadh also agreed terms with a group of international lenders for a $10bn loan, its first sovereign debt in at least 15 years.

Abu Dhabi, the biggest emirate in the UAE, launched a two-part $5bn bond, while Kuwait has indicated interest in tapping capital markets to raise funds.