Riyadh has agreed terms with a group of international lenders for a $10bn loan, its first sovereign debt in at least 15 years.

The government has agreed to pay lenders about 120 basis points above the London interbank offered rate (Libor) including margin and fees for the facility, according to news agency Bloomberg citing sources familiar with the deal.

The loan, which is expected to be signed before the end of April will have a life span of five years.

A large group of lenders from US, Europe, Japan and China are committing funds to loan facility. Saudi Arabia’s was initially planning to raise as much as $8bn generated significant interest from the banks and was oversubscribed, allowing the kingdom, Opec’s top oil producer to inflate the size of the deal.

It is the largest loan deal in the region since state-owned Saudi Aramco, the world’s largest oil producer, raised $10bn in financing in March 2015. Gas-rich Qatar had raised $5.5bn in December.

Saudi Arabia has not borrowed from international capital markets since at least 1999, according to the news agency.

The kingdom, the world’s top oil exporter, is introducing sweeping reforms to cut its dependence on sale of hydrocarbons for revenues after oil slumped from a mid-2014 peak. Saudi Arabia, which expects a SR326bn ($87bn) budget deficit in 2016, is running and austerity campaign and is looking for alternative revenue streams to close the budgetary gap. Riyadh is also mulling plans to monetise some of its assets and has identified about 146 companies, including the oil giant Saudi Aramco, in which its plans to sell take to public or strategic private investors.

The kingdom will prepare for a bond sale and start a two- or three-year program once it concludes the loan deal, Minister of State Mohammad bin Abdulmalik Al-Sheikh said last month.