Irish/German yield spread at euro-lifetime high

(Corrects Irish spreads in final paragraph)

LONDON Nov 26 (Reuters) - The premium investors demand to hold Irish government bonds rather than benchmark German debt hit a new euro-lifetime high on Friday, on reports that senior bondholders would share the cost of rescuing Ireland's banks.

"There was talk in the Irish press that there's some risk that (Irish) government bonds will be restructured, which is a significant risk if that is the case" said Harvinder Sian, strategist at Royal Bank of Scotland in London.

The International Monetary Fund and European Union have been examining proposals for making senior bondholders share the cost of rescuing Ireland's banks, The Irish Times reported on Friday, citing an unnamed source. [ID:nLDE6AP0BY]

The Irish/German 10-year bond yield spread IE10YT=TWEB DE10YT=TWEB rose to 691 basis points from around 676 bps at Thursday's settlement.

(Reporting by William James and Anna Yukhananov)