Santander places 2 bln euros in preference shares

MADRID, July 1 (Reuters) - Spain's largest bank Santander (SAN.MC) has completed its planned placement of 2 billion euros ($2.81 billion) of preference shares after giving investors an extra four days to acquire them, a source close to the deal said on Wednesday.

The yield paid on the shares, which will reinforce Santander's core Tier-1 capital ratios, is lower than that for similar products and interest levels accepted by professionals, stockmarket regulator CNMV said when it approved the issue.

Holders of the shares will receive interest of 5.75 percent for the first year after the issue, 4.75 percent for the second, and three month Euribor plus 2.2 percent afterwards.

CNMV has made similar comments over recent preference share issues by Santander's peer BBVA (BBVA.MC) and its unit Banesto (BTO.MC)

(Reporting by Jesus Aguado, writing by Jonathan Gleave; editing by Elaine Hardcastle)