The average yield on Middle Eastern dollar bonds fell more than 60 basis points, or 0.6 percentage point, to 4.8 percent from this year's high in January, according to JPMorgan Chase & Co. indexes. That's as the oil price, which has more than halved since mid-2014, recovered some ground. The issuance is a sign the world's biggest oil-exporting region wants to move away from plundering rainy-day funds to bridge the almost $900 billion of fiscal shortfalls the International Monetary Fund estimates they will face through 2021.

Saudi Arabia, which drained 20 percent of its foreign assets since the end of 2014, is looking to sell bonds after the holy month of Ramadan, which ends in July, people familiar with its plans said. Oman will meet with investors in London and the U.S. this week and next for a debut dollar bond sale, a person familiar with the information said on Wednesday, asking not to be identified.

“Saudi and the Gulf countries need funding to cover the trail of red ink left by low crude prices,” said Greg Saichin, who helps manage $2.4 billion as chief investment officer for emerging-market fixed income at Allianz Global Investors Europe GmbH.

The GCC is home to almost a third of the world's proven oil reserves, and governments in the region rely on crude sales to fund public spending. Saudi Arabia may post a budget deficit of $87 billion this year, and Qatar's may reach $13 billion, its first shortfall since 2011, according to central bank data compiled by Bloomberg.

'Difficult' Profiles for Sovereign Debt

Argentina's successful return to global bond markets this year following its historic 2001 default helped convince other countries with “difficult sovereign profiles,” like Oman and Saudi Arabia, to bring big offerings to market, said Sergey Dergachev, who helps oversee $13 billion of emerging-market debt as a senior money manager at Frankfurt-based Union Investment Privatfonds GmbH.

Russia also came back to international capital markets. Last week, the country raised $1.75 billion in a sale of 10-year notes, its first since U.S. and European sanctions were imposed in 2014 against some of its companies and individuals over involvement in the Ukrainian conflict. More than 70 percent of the sale was placed with foreign investors, according to Russia's finance ministry.

“The volume of deals these past two months has been unprecedented for emerging markets,” said Angelo Rossetto, a trader at GMSA Investments Ltd. in London. “It is a race to print before Fed liftoff.”

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