Bahrain is preparing to launch a bond sale to tap the international markets, as it seeks ways to refinance debt due to strained finances from lower oil prices, according to Bloomberg News on Monday.

The country has asked banks to provide proposals for a bond sale that could potentially raise at least $1.5 billion, sources told the news agency.

The Gulf state reportedly needs to refinance debt that will be due over the next few months.

Bahrain has recently launched a development bond worth BD 200 million ($527 million). The local currency-denominated bond was significantly oversubscribed, drawing subscriptions worth more than BD 771 million. 

Last week, S&P revised Bahrain’s outlook to negative from stable on persisting fiscal pressure. 

The ratings agency said that weaker oil prices and stalling fiscal reforms will be the key factors that will keep government debt rising.

Gross government debt is forecast to rise to 144% of GDP in 2028, from 130% last year.

“Ongoing market volatility and weaker financing conditions could add further pressure to the government’s interest burden, which is among the highest of our rated sovereigns, and to foreign currency reserves,” S&P said.

(Writing by Cleofe Maceda; editing by Seban Scaria)