Oman plans to slash its borrowing requirements for 2019 by as much as 70 percent and rely on asset sales to plug one of the largest budget deficits among oil exporters, according to a senior government official.

The Gulf Arab monarchy will likely raise between $2 billion and $3 billion in bonds and loans, the official said on condition of anonymity because the plans haven’t been made public. The budget had listed debt requirements of about $6.2 billion.

Oman is working with legal advisers to update its bond program and will tap the market before early May. The country plans to plug its funding gap using dividends and capital gains received from Oman Oil Co.’s stake sale of the Khazzan field, the official said. An additional $1 billion will come from the ownership transfer of some gas pipelines to Oman Gas Co., he said.

“The market was expecting $6 billion of supply, if we get less and if we see evidence of fiscal consolidation and discipline in Oman we should see spreads tighten,” Abdul Kadir Hussain, head of fixed-income asset management at Dubai-based investment bank Arqaam Capital Ltd.

The country’s dollar bonds due in January 2028 gained the most on record, with the yield falling as much as 47 basis points to as low as 6.35 percent. The securities were trading at 6.52 percent by 11:22 a.m. in London on Thursday.

The plan is helping to pair losses in Oman’s bonds as the country grapples with volatile oil prices. The yield on dollar-denominated securities due in 2028 had risen almost 100 basis points since the end of September through Wednesday, according to data compiled by Bloomberg.

‘Looking Ambitious’

Oman may come to the market before May to beat other issuers from the Middle East and North Africa, such as Qatar and companies from Saudi Arabia, to get better pricing, Jaiparan Khurana, a London-based strategist at Morgan Stanley, wrote in a note, citing Bloomberg’s story. “With 2019 budget forecasts looking ambitious versus the 2018 out-turn, slippages cannot be ruled out,” he said.

Oman, with an expected budget deficit of 9 percent of gross domestic product this year, has been slow to implement reforms following the crash in oil prices in 2014. Since then, its debt as a share of economic output has risen 10 fold to 50 percent.

Fitch Ratings downgraded the country’s debt to junk in December, fueling a sell-off in the nation’s bonds. Moody’s Investors Service is the only rating company that has Oman at investment grade, though it’s just one level above junk.

The government official said some of the needed borrowing will come from tapping a $1.2 billion loan backed by the World Bank’s Multilateral Investment Guarantee Agency. Any additional funding will come through domestic borrowing, the official said.