Oman has closed a $1bn sovereign loan, a Finance Ministry spokesperson told Reuters.

The five-year loan has a margin of 120 basis points over the London interbank offered rate (Libor).

The arrangers were the US’ Citigroup, Manama-based Gulf International Bank and France’s Natixis.

Oman’s budget projects a RO3.3bn ($8.6bn) deficit in 2016, to be funded by domestic and international borrowing, and drawdowns from sovereign wealth funds.

If oil prices remain below $35 the deficit could be larger, as happened in 2015.

Reuters reported in November that Muscat was seeking 110 basis points over Libor. After the US Standard & Poor’s downgraded Oman’s rating to BBB+ with a negative outlook, the pricing demanded by lenders was higher.

This is the first time Oman has borrowed on international markets since 1997.

Qatar began marketing a $5.5bn sovereign loan to international banks in late 2015, at 85 and 95 basis points over Libor, according to Reuters. It is expected to close imminently.