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DUBAI- Oman received strong demand from global investors for U.S. dollar bonds it marketed on Thursday in its first foray in the international debt markets this year, according to a document issued by one of the banks leading the sale.
Investors made orders worth over $9.25 billion for papers offered at a yield of around 5.125% for the long five-year bonds and a yield ranging between 6.125% and 6.25% for the 10-year, according to the document.
That is slightly below where it marketed the bonds earlier on Thursday.
Sources previously said the bonds would likely be $2 billion in size and be used to cover part of Oman's budget deficit, estimated at nearly $7.3 billion this year.
Oman's finances have been hurt by a slump in oil prices and the country is struggling to tame a widening fiscal deficit.
The bond sale is seen as a test of Oman's ability to tap foreign debt markets after it was downgraded to junk status by all the three major rating agencies and comes amid favourable market conditions across emerging markets.
"The low yield environment is a supportive theme. We have a rising number of negatively yielding securities and credits with attractive yield levels like Oman should get a boost," said Sergey Dergachev, a manager of emerging market corporate debt at Germany-based Union Investment.
The initial price guidance put the new paper at a premium of around 30 basis points over Oman's existing debt curve, said Dergachev.
Citi, JPMorgan and Standard Chartered have been hired to coordinate the transaction, which will be priced later on Thursday.
The three banks are also bookrunners together with First Abu Dhabi Bank, MUFG, Natixis and Societe Generale.
(Reporting by Davide Barbuscia; Editing by Catherine Evans and Raissa Kasolowsky) ((asma.alsharif@thomsonreuters.com; +20225783290; Reuters Messaging: asma.alsharif.reuters.com@reuters.net))