UPDATE 1-Slovenia to guarantee Abanka 750 mln euro bond

* Bond to be issued by the end of 2009

* Proceeds to be used for loans

(Updates with Abanka's statement in paras 3-4))

LJUBLJANA, July 30 (Reuters) - The government said on Thursday it will guarantee a bond issue of upto 750 million euros ($1.06 billion) by Slovenia's third largest bank Abanka Vipa (ABKN.LJ).

Abanka said it plans to issue the bond by the end of this year. The proceeds will be used for loans to businesses and individuals.

"The issue date will depend upon market conditions and our liquidity needs," Abanka said in a statement prepared for Reuters.

The government has offered state guarantees for bank loans and bond issues worth a total of 12 billion euros in order to improve liquidity of the banking system.

So far, only the country's largest bank Nova Ljubljanska Banka (NLB) has asked for and received a state guarantee for a bond of 1.5 billion euros which was issued earlier in July. ($1=.7095 Euro)

(Reporting by Marja Novak, Editing by Victoria Main)