Erste can sell $8 bln in govt-backed debt -Fitch

VIENNA Jan 12 (Reuters) - Austria's Erste Group Bank (ERST.VI) has agreed a debt issuance program under which it can sell up to 6 billion euros ($8 billion) in government-backed bonds, credit ratings agency Fitch said on Monday.

Fitch on Monday rated the program, under which the Republic of Austria unconditionally and irrevocably guarantees repayment, as AAA -- the same rating assigned to Austria itself.

Erste confirmed that it was preparing to issue government-backed bonds but declined to give more detail.

Erste's program is the first of its kind under the Austrian banking stability package, which has earmarked 100 billion euros in equity and guarantees to prop up its banking sector.

Commerzbank (CBKG.DE) last week became the first German lender to launch a bond backed by state guarantees, creating a new asset class and opening the way for other banks in Europe to follow suit.

Commerzbank's 5 billion euro, 3-year bond was priced at 30 basis points over mid-swaps, offering a significant spread over straight German government debt despite effectively offering the same low risk.

Fitch said that debt issues under Erste's program will have a minimum maturity of one year and a maximum maturity of five years. The aggregate principal of outstanding notes under the debt issuance programme cannot exceed 6 billion euros, it said.

Fitch added that it expected other Austrian banks to follow suit. (Reporting by Boris Groendahl; Editing by David Cowell)