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UPDATE 2-Spain plans new 10-yr syndicated bond in Q3

Published 06/18/2010, 06:18 AM

* No date yet for planned syndicated bond issue

* Treasury also plans 5 regular bond issues in Q3

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MADRID, June 18 (Reuters) - Spain plans to issue a new 10-year syndicated bond in the third quarter, the Treasury said, the same quarter as a 24 billion euro ($30 billion) repayments crunch which falls in July.

It also plans 5 regular bond issues during the quarter. The Treasury did not give a date for the issue of the syndicated bond. The bond auction timetable was in line with expectations, one analyst said.

"It's a regular issuance, but it's quite a test for the market. We haven't seen syndicated deals for quite some time so this could be one of the first," said Wilson Chin, senior debt strategist at ING in Amsterdam.

"Issuers were waiting for signs risk appetite has increased," he said. Spain on Thursday pushed through the sale of 3.5 billion euros of 10- and 30-year bonds, albeit at a high premium, sparking a relief rally in the euro and European stocks hit by speculation of a Greek-style bail-out for Spain.

One analyst said it made sense for Spain to call for a syndicated bond.

"At the moment, it may be important to make sure that they will be able to find 10-year funding. So in current circumstances, it makes sense to call for a syndicated bond," said Patrick Jacq, strategist at BNP Paribas.

Madrid, which must settle 16.2 billion euros in bond redemptions and around 8 billion euros of treasury bills next month, flagged plans to issue a 3-year benchmark on Aug. 5; 5-year benchmarks on July 1 and Sept. 2; a 15-year benchmark on July 15 and a 30-year benchmark on Sept. 16.

An Economy Ministry source told Reuters on Thursday the Treasury had sold enough debt to deal with the July repayments. [ID:nLDE65G1KX]

The Treasury drew strong demand at Thursday's sale of 10- and 30-year bonds, hitting the top of its target range. The 10-year average yield was 4.864 percent compared with 4.045 percent at the previous auction on May 20, while the 30-year yield jumped to 5.908 percent from 4.758 percent on March 18.

Spain's 10-year bond spread against Germany narrowed on Friday after it hit a new euro lifetime high ahead of the bond sale on Thursday, hitting 204 basis points at 0950 GMT. (Additional reporting by Ian Chua and William James)

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