RIYADH: Bahrain has started talks with banks over a potential international debt sale in the second half of this year, Bloomberg reported citing people familiar with the matter.

The discussions are still preliminary, the people said, asking to remain anonymous as plans are private.

This debt sale would bring some relief to Bahrain after witnessing a sharp deterioration in finances during 2020 amid widespread lockdowns imposed by the pandemic, which curbed demand for energy and dragged Brent crude to the lowest level in about two decades.

The last time the Bahraini Kingdom tapped the international debt market was in January, when it raised $2 billion.

Bahrain’s 2020 budget deficit of 1.6 billion dinars ($4.2 billion) exceeded the government’s projection in its fiscal plan.

Moody’s Investors Service and S&P Global Ratings lowered the country’s outlook to negative in the last few weeks.

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