(Bloomberg) — Qatar sold $3 billion of dollar bonds Thursday, 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.

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The sovereign priced $1 billion of three-year senior unsecured notes and $2 billion of 10-year bonds, according to a person familiar with the matter who asked not to be identified.

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 had placed orders for more than $12 billion of the debt, according to a person familiar with the deal.

Tight Spreads

The spreads on both tranches tightened significantly. The three-year notes priced at 30 basis points over, after being initially marketed at about 60 basis points over the government benchmark. The 10-year bonds priced at 45 basis points over after being initially offered at about 80 basis points over the benchmark.

JPMorgan Chase & Co., QNB Capital LLC, and Standard Chartered Plc acted as global coordinators for the sale, with StanChart also serving as the billing and delivery agent. Additional lead managers included 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.

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