Qatar is in talks with banks for a syndicated loan of up to $10 billion as it looks to become the latest Gulf state to try to shore up funds depleted by low oil prices, bankers said on Monday.

Oman is also expected to launch a $1 billion loan into general syndication within the next couple of days, bankers said. Citibank, Natixis and Gulf International Bank are coordinating the deal, which has been fully underwritten.

Qatar is in discussions for a five-year loan, which is expected to carry a margin below 100bp over Libor, one of the bankers said.

It is aiming to complete the deal by the end of the year.

The bankers said it could be a challenge to raise $10 billion as local banks are pulling out of the loan market because of the rising cost of dollar funding and ironically, the withdrawal of deposits by Gulf states such as Qatar, which is putting enormous pressure on their liquidity.

"Qatar is talking to a large group of banks about the deal but I am not sure it will be able to raise the whole $10 billion," one of the bankers said.

Qatar last tapped the loan market in 2004 when it agreed a $355 million, five-year loan that paid a margin of 38bp over Libor, according to Loan Pricing Corp data. - Reuters