UPDATE 2-Greece will roll over T-bills due to aid delay
* More than 5 bln euros in T-bills due on Nov. 16
* Greece expects aid tranche only after bills mature
* ECB expected to let Greece raise ceiling on amount of T-bills allowed
By Lefteris Papadimas
ATHENS, Nov 9 (Reuters) - Greece will roll over 5 billion euros in treasury bills that mature on Nov. 16 because of a likely delay in getting the next tranche of its international bailout, a finance ministry official said on Friday.
The government narrowly approved austerity and labour reforms this week, boosting its effort to unlock the 31.5 billion euro loan Athens needs to pay off debt and shore up its banks. It is also expected to pass the 2013 budget on Sunday.
But a senior European Union official said on Friday euro zone finance ministers were unlikely to make a final decision on delivering the loan at a Monday meeting since a report on whether the country's debt was sustainable was not yet ready.
Too cash-starved to redeem the bills outright, the country's debt agency announced it would auction off 1 billion euros in three month treasury bills and 2.125 billion in four-week papers on Nov. 13.
The issue is above the normal amount of 1 to 2 billion euros, and the debt agency will follow up with supplementary sales to gain the full 5 billion euros to roll over the notes coming due.
"We will get 5 billion," said a Greek official, who declined to be named.
Asked about a possible delay in the release of aid, Greek Finance Minister Yannis Stournaras said the country had "no reason for worry".
"Greece is doing whatever it should be doing, and Europe is doing what it should be doing ... and the tranche will be released," he said.
The EU official said euro zone ministers were aware that Greece needed money to redeem several billion euros worth of treasury bills and were taking that into account in their discussions. There would be no default, accidental or otherwise over the Nov. 16 redemption, the official said.
"The debt sustainability analysis is an integral part of the compliance report of the troika and only once there is agreement that the evolution of debt to GDP ratio over a given time period is sustainable, then and only then can we say that we are prepared to disburse," the official said.
In August, Athens increased the size of its monthly T-bill auction after the European Central Bank agreed to raise the ceiling on the amount of such bills the Bank of Greece can accept as collateral in exchange for emergency loans.
That gave the government access to up to an extra 4 billion euros of funds. Greek banks taking up the bulk of T-bill issues can park the paper at the local central bank to tap its emergency liquidity assistance (ELA) window.
The ECB is expected to allow Greece to raise that ceiling again so that it can cover the bills coming due next week, analysts say.
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