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(Bloomberg) -- Qatar is marketing a benchmark-sized dollar-bond issue, banking on its reputation as one of the safest emerging-market credits to help plug a budget gap caused in part by falling oil and gas prices.

The sovereign is selling senior unsecured notes in three-year and 10-year fixed-rate tranches. The deal, which may price later Thursday, is expected to be rated Aa2 by Moody’s, AA by S&P, and AA by Fitch.

After posting a surplus on its budget and current account in 2024, Qatar is expecting a shortfall this year. It’s leader, Sheikh Tamim bin Hamad al Thani, approved a budget in December that set the deficit at 13.2 billion riyals ($3.62 billion). That assumed an average liquid natural gas price, linked to the cost of crude oil, of $60 per barrel, far below the current level of Brent crude at around $76.

The country’s sovereign spread over Treasuries is about 67 basis points, compared with an EM-wide average of 317 basis points, marking it as one of the least risky developing nations for bond investors.

“Noting how tight credit spreads are for Qatar, even by regional standards, and how flat spread curves are at the moment, it makes sense for the sovereign to capitalize on these valuations and issue,” said Fady Gendy, a fixed-income portfolio manager at Arqaam Capital Ltd. in Dubai. “There will be robust demand for this AA-rated paper from both local banks as well as rating-sensitive investors.”

Investors have placed orders for more than $12 billion of the debt, according to a person familiar with the deal who asked not to be identified.

Tight Spreads

The three-year notes are being marketed at about 60 basis points over the government benchmark, while the 10-year bonds are offered at about 80 basis points over the benchmark.

JPMorgan Chase & Co., QNB Capital LLC, and Standard Chartered Plc are acting as global coordinators for the sale, with StanChart also serving as the billing and delivery agent. Additional lead managers include Banco Santander SA, Barclays Plc, Citigroup Inc., Credit Agricole SA, Deutsche Bank AG and Goldman Sachs Group Inc. The bonds will be listed on the London Stock Exchange and governed by English law.

Qatar’s government has a $2 billion bond maturing in April. Analysts of Fitch Ratings expected the government to continue to replace upcoming maturities and diversify its funding sources.

“The subsequent debt path will depend on how the government chooses to deploy its fiscal surpluses,” they said in September.

Moody Ratings analysts said last year the significant improvement in Qatar’s fiscal metrics achieved during 2021-23 will be sustained in the medium term. This view is underpinned by the rating company’s expectation that the government will continue to maintain fiscal prudence, including by continuing to wind down its infrastructure spending program.

The large ramp-up in Qatar’s LNG production, scheduled and on track for 2026-28, will boost growth, government revenue and exports, Moody’s said.