The government of Bahrain has selected a group of five regional and international banks to help it raise funds through a benchmark-sized Eurobond transaction.

The mandated lead arrangers of the deal which is expected to be marketed later this year, include Bank ABC, BNP Paribas, Credit Suisse, JP Morgan and Standard Chartered Bank, according to London-based news services IFR, which cited a banker familiar with the matter. Benchmark-sized transactions usually refers to deals of at least $500m.

Another banker said that the government has yet to make a formal announcement of the deal or the mandate. Earlier reports said that the bond sale will take place sometime after summer.

Governments of hydrocarbon-reliant governments of GCC are eager to tap the debt markets ahead of possible rate increase by the US Federal Reserve in order to shore up capital and plug budget deficit amid shrinking oil revenues.

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.

Bahrain is the latest GCC state to consider tapping the international bond market. In June, Oman 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 for 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.