(Adds pricing details)
MADRID Nov 26 Spain's second-biggest bank BBVA
issued a 2 billion euro ($2.6 billion) covered bond on
Monday at a lower yield than five year Spanish government bonds,
Thomson Reuters news and market analysis service IFR reported.
The bond, which carried a 3.5 percent coupon and matures in
December 2017, was priced at 260 basis points over mid-swaps,
according to IFR. It was BBVA's first such deal of the year.
At around 1200 GMT the bond had already received 2.3 billion
euros in bids. Demand was helped by a recent lack of covered
bond deals, bankers told IFR.
By comparison, Spanish five-year government bonds were
trading at close to 360 basis points over mid-swaps earlier in
The bank mandated Barclays, BBVA, Citi, Deutsche Bank, ING
and Natixis for the issue.
($1 = 0.7717 euros)
(Reporting by Clare Kane, Tomas Cobos and Sarah White; Editing
by Helen Massy-Beresford and Mark Potter)