Qatar Sells $1.26 Billion in Local Bonds as it Wrestles Deficit

Qatar, the world’s largest exporter of liquefied natural gas, sold local currency bonds as the government seeks to fill a budget gap caused by the slump in energy prices.

The Qatar Central Bank raised 4.6 billion riyals ($1.26 billion) from a mixture of conventional and Islamic bonds in maturities of three, five, seven and 10 years, according to data posted on the regulator’s website Tuesday. Pricing on the bonds ranged from 2.25 percent for the three-year notes, to 3.75 percent for the 10 year.

Oil exporting Gulf states are tapping the bond market to fill budget shortfalls caused by a slump in crude prices that could reach $900 billion by 2021, according to International Monetary Fund estimates. Saudi Arabia may raise at least $10 billion from an international offering in October, people familiar with the sale told Bloomberg last month. Bahrain has also appointed banks to manage a bond issuance, according to people with knowledge of the plan, and Kuwait is planning debt sales.

Qatar faces a budget deficit of 4.9 percent of economic output this year, according to the median of seven economist estimates compiled by Bloomberg. The government raised $9 billion from the Middle East’s biggest ever bond sale in May. It also sold 4.6 billion riyals of local currency bonds in August, according to data compiled by Bloomberg.

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