Jordan aims to launch its first $500 million Eurobond by early October to capitalise on greater investor confidence and tap lower-cost funding, the finance minister said on Monday.

Mohammad Abu Hammour said the government aimed to raise money amid signs of a recovery in Jordan's economy and political support for a tough fiscal consolidation plan.

At least 10 major banks have offered to lead-manage the five-year sovereign eurobond issue, which would help Jordan diversify its borrowing sources, said Abu Hammour, adding that the lead-manager would be picked by mid-July.

"We hope to take advantage of both favourable market conditions and heightened investor confidence in Jordan," he told Reuters in an interview.

Jordan last month said it sought to tap international markets to capitalise on healthy global demand for sovereign issues from emerging markets.

The kingdom is seeking to issue five-year paper on either a floating basis based on six- or three-month LIBOR or a fixed rate basis leaving the spread and issue price to be proposed by the banks.

Demand and the pricing sought was expected to reflect Jordan's "strong macro-economic fundamentals and a track record of political stability", Abu Hammour said.

"We are leading the way with bold fiscal measures to rein in public spending and hike taxes under an austerity package," Abu Hammour said, adding the budget deficit was on target to drop by 3 percentage points to 6.3 percent this year.

"There are already signs of a pickup in investment that indicate growth is resuming at a faster pace," he added, referring to above 4 percent growth forecast this year from 2.8 percent last year.

Even though the focus was on a Eurobond offering, banks could also propose a Sukuk, or Islamic bond, issue and even longer maturity paper if that could reduce the cost of financing and attract greater investor interest, Abu Hammour said.

As Jordan is not a regular issuer, the pricing could also create a sovereign curve and pave the way for a more active secondary market in government debt paper, Abu Hammour said.

Banking sources say that among the banks that have submitted offers are JPMorgan, HSBC, Arab Bank, UBS, Qatar National Bank, BNP Paribas, Citibank, Credit Suisse, Deutsche Bank and Standard Chartered.-Reuters