UPDATE 1-Spain plans 10-year euro syndicated bond

Mon Jan 21, 2013 9:03am EST

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LONDON, Jan 21 (IFR) - The Kingdom of Spain, rated Baa3/BBB-/BBB, plans to issue a 10-year euro-denominated syndicated bond in the near future, banks managing the deal said on Monday.

Barclays, BBVA, Citi, Goldman, Santander and Societe Generale have been mandated to run the books, and initial price expectations are expected to emerge as early as Tuesday morning for pricing later in the afternoon, the leads said.

Spain was last in the syndicated bond market in February 2012 with a tap of its 5.85% January 2022 note.

Barclays, BBVA, Deutsche Bank, Goldman Sachs, Santander and Societe Generale managed that EUR4bn tap.

Since then, the sovereign has steered clear of the syndicated market opting for public auctions instead.

It has already issued about EUR10bn via auctions in 2013 and pre-funded this year's financing needs by EUR5bn late in 2012. This year it has medium- and long-term financing needs in excess of EUR120bn.

Leads declined to comment on the size of the bond, though one said that it would likely be at least EUR3bn.

MATURITY

The leads said that the country already had bonds outstanding that mature in January 2022 and January 2024.

"Filling that gap in their funding is therefore a natural step," one banker involved said.

A range of Iberian credits have recently enjoyed success in the fixed-income markets, including some which struggled last year.

Earlier this month, Spanish agency FADE - which twice had to pull deals in 2012 - saw its 4.125% EUR1bn four-year issue more than twice subscribed.

National champions such as Telefonica, Gas Natural and BBVA have attracted strong orderbooks for offerings too, paving the way for higher beta credits like Bankinter, Caixa General, Sabadell and Red Electrica. (Reporting by Natalie Harrison and Josie Cox, IFR Markets; editing by Julian Baker, Alex Chambers)

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