UPDATE 3-Japan's Orix to raise $1 bln in share sale -sources

* To announce share sale as early as this week-sources

* Follows 150 bln yen convertible bond last year

* Offering comes amid signs property market bottoming out

* Shares fall 5 percent, broader market up 0.5 percent (Adds credit risk information in paragraph 10)

By Junko Fujita and Nathan Layne

TOKYO, July 1 (Reuters) - Orix Corp (8591.T), Japan's biggest leasing firm and a major property investor, plans to raise about 100 billion yen ($1 billion) through a public share offering, three sources said, sending its shares sliding 5 percent.

Orix would become the latest in a series of Japanese financial firms to tap more recently buoyant equity markets for funds, amid signs the economy and property market to which it is heavily exposed may have bottomed out.

Raising 100 billion yen would require Orix to issue about 17 million new shares at Tuesday's closing price, increasing its number of shares outstanding by roughly 20 percent.

The company plans to make the share sale a global offering, with an official announcement as early as this week, the people told Reuters, speaking on condition of anonymity because they are not authorised to comment publicly about the deal.

Orix said in a statement that nothing had been decided.

A public share offering would follow a 150 billion yen convertible bond sale announced in November last year.

News of the convertible bond, coupled with concerns over its ability to raise funds and exposure to the deteriorating property market, helped fuel a three-month slide of some 80 percent in its stock price to a low around 1,700 yen in late February.

Orix's stock has since recovered some of that lost ground, although it fell 5 percent on Wednesday to 5,520 yen on the share sale news. The Nikkei benchmark average .N225 was up 0.5 percent.

Concern about Orix's ability to secure funds has also pushed wider the spread on its credit default swaps, a measurement of credit risk.

The spread was at 595 basis points as of June 26, according to a UBS Securities Japan report, compared with 510 basis points a month ago.

It also made a filing on Tuesday to sell up to 700 billion yen in bonds in Japan, ahead of the expiry of its current filing on July 4. The company had 7.2 trillion yen debt as of March.