Oman is raising $2.5bn through the sale of dual-tranche bonds, making it the latest Gulf state to tap international debt capital markets in order to plug widening budget deficits on the back of lower oil prices.

The sultanate is launching five- and 10-year bonds, according to UK news agency Reuters, which cited a lead on the transaction. A $1bn five-year note will price at 245 basis points (bps) over mid-swaps, while a $1.5bn 10-year tranche has been launched at plus-320 bps.

The sovereign was earlier marketing the five-year notes at about plus-250 bps and the 10-year tranche at about plus-325 bps. Both bonds had price ranges of plus or minus 5 bps. Oman had guided the prices in the plus-262.5 bps area on the five-year tranche and in the plus-337.5 bps area on the 10-year note.

A mix of international and regional banks including the US’ Citigroup and JPMorgan, Japan’s Mitsubishi UFG, National Bank of Abu Dhabi and France’s Natixis are running the 144A/Reg S trade.

Oman’s budget projects an RO3.3bn ($8.6bn) deficit in 2016, which the sultanate plans to fund through domestic and international borrowing, and drawdowns from its sovereign wealth funds.

In total the country plans to raise between $5bn-$10bn this year and could issue a eurobond in the first half of this year, Hamoud Sangour al-Zadjali, governor of the Central Bank of Oman said in February.

The country, which is rated Baa1 by the US’ Moody’s Investors Service and BBB- by the US’ Standard & Poor’s, last tapped the debt markets through a $1bn sovereign loan in January this year. The five-year loan offered a margin of 120 bps over the London interbank offered rate (Libor). Citigroup, Manama-based Gulf International Bank and Natixis helped the sovereign close the syndicated loan.

Governments and private firms in the region are queuing up to tap debt capital markets ahead of a possible interest rate hike by the US Federal Reserve.

Last month Qatar raised $9bn in a three-tranche bond offering. Saudi Arabia is looking to raise as much as $15bn from a bond offering after Ramadan ends in July. 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.