* Athens says 3-year bond to be issued soon
* Source has said it will raise up to 3 bln euros
* Pricing expected on Thurs - market source
* New issue is second in three months
(Recasts with confirmation, govt official quotes)
By Lefteris Papadimas and Alex Chambers
ATHENS/LONDON, July 9 Greece said on Wednesday
it has hired banks for a new three-year euro bond, the
aid-reliant nation's second debt sale since returning to
financial markets in April.
The issue is expected to raise up to 3 billion euros, a
source with knowledge of the matter has said previously.
Athens has been looking to exploit favourable debt market
conditions to cement its return to markets and signal its
emergence from a protracted debt crisis that nearly sent it
crashing out of the euro zone two years ago.
Greece's finance ministry said on Wednesday that the
three-year benchmark deal will be issued and priced in the near
future subject to market conditions, without providing further
A market source said pricing was expected on Thursday.
The announcement confirms a Reuters report in June that
Athens was considering a sale before August of a bond with a
maturity of three or seven years to raise 2 billion to 3 billion
The sale would follow Greece's 3 billion euro sale of
five-year bonds in April.
Greek officials have stressed the aim of the issue is to
fill a space in the medium-term part of Greece's yield curve
rather than an effort to fund itself unaided. Athens remains
hooked on 240 billion euros in bailout funds from the EU and
IMF, despite enjoying a sharp turnaround in investor sentiment
as it begins to steady its finances.
Greece has set initial price thoughts on the bond at a yield
of 3.5-3.625 percent, according to one of the lead
"We are aiming for a yield in the region of 3.5 percent,
despite the recent turmoil in the euro zone's periphery," a
senior government official said, on condition of anonymity,
referring to the upward move in Portugal's bond yields on
concerns over the health of Portuguese financial group Espirito
"The main aim of the issue is to fix the yield curve and not
to cover our financing needs which we can do by other means."
Bankers said appetite is expected to be strong for debt
issued by twice-bailed-out Greece, whose April bond sale after a
four-year exile was also successful.
"We expect the issue of the three-year bond today or
tomorrow. I think it will be a success. There is great interest
in Greek assets abroad," a banker said.
Greece is targeting a return to economic growth this year
after a six-year depression that has shrunk its economy by a
quarter - its deepest economic slump in six decades.
Despite the success of its April bond sale, Greece is not
expected to make a quick shift towards covering all its funding
needs in the markets and has said its return to bond markets
will be a "trial and error" process.
The IMF estimates Greece faces a funding shortfall of 12.6
billion euros for the financial year starting in May 2015,
though Athens believes any gap can be covered through measures
like new bond issues and leftover bank bailout funds.
Five lead managers - Bank of America Merrill Lynch,
Citigroup, Deutsche Bank, Goldman Sachs
and JP Morgan - are running the debt sale, sources with
knowledge of the matter said.
(Additional reporting by Sarka Halas; Writing by Deepa
Babington; Editing by Catherine Evans and Susan Fenton)