DUBAI  - The government of Oman has begun marketing a seven-year U.S. dollar-denominated sukuk, or Islamic bond, according to IFR, a fixed-income news service.

The paper is being marketed with initial price guidance of about 300 basis points over mid-swaps.

The sukuk will be of benchmark size, which generally means upwards of $500 million.

Gulf International Bank, HSBC, JP Morgan, KFH Capital and Standard Chartered are arranging the planned debt issue, which is expected to be finalised later on Wednesday.

(Reporting by Davide Barbuscia Editing by David Goodman) ((Davide.Barbuscia@thomsonreuters.com; +971522604297; Reuters Messaging: davide.barbuscia.reuters.com@reuters.net))