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UPDATE 1-Finmeccanica launches at least $500 mln 10-yr bond

Wed Jul 8, 2009 11:08am EDT

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* Final amount to depend on demand -source

Italy

* Yield 301-349 basis points over comparable US Treasuries

(Releads with details from lead managers)

MILAN, July 8 (Reuters) - Italian defence company Finmeccanica SpA (SIFI.MI) has launched a new 10-year bond which will be worth at least $500 million, lead managers to the issue told Reuters on Wednesday.

The final amount will depend on demand, a source close to the operation told Reuters. Market sources suggested it would be between $750 million to $1 billion.

"The order books opened (around 1400 GMT) and the first indications for the yield are in a range in the low to mid 300 basis points over comparable U.S. Treasuries," one of the lead managers said.

That could be between 301 and 349 basis points -- a spread which will be narrowed later.

Finmeccanica joins a growing number of companies which are taking advantage of more favourable market conditions currently to launch corporate bonds.

Other recent borrowers in Europe include Stora Enso (STERV.HE), cable operator UPC, German logistics company IFCO Systems and Italian bank UniCredit (CRDI.MI).

Finmeccanica's bond issue is part of the plans laid out by the company when it bought U.S. group DRS Technologies DRS.N in a deal worth nearly $4 billion announced in May 2008.

Finmeccanica issued a 750 million euro bond in November 2008 which was upped to 1 billion euros in December, and a 400 million pound bond in April 2009.

Finmeccanica has a 'BBB' rating with Standard & Poor's and Fitch while Moody's rates the company's debt 'A3'. (Reporting by Gabriella Bruschi; writing by Danilo Masoni and Jo Winterbottom; Editing by Hans Peters)

Italy


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