UPDATE 1-Spain raises net bond issues in 2020 to 130 blns euros to cope with COVID-19

(Gives breakdown and details)

MADRID, May 21 (Reuters) - Spain will raise net borrowing on financial markets to 130 billion euros ($143 billion) in 2020 to pay for coronavirus-linked spending, the economy ministry said on Thursday.

The government will raise an additional 97.5 billion euros more than the 32.5 billion originally planned for this year.

The Treasury has so far issued around 48% of its 297.66 billion gross debt target for this year, the ministry said in its statement.

A ministry source said Spain was likely to tap 15 billion euros from the so-called SURE line, a European tool to face the coronavirus crisis and pay unemployment benefits, to complete its 130 billion euros issuance programme in 2020.

However, the source said it was still too early to decide if it would also tap the proposed 500 billion euros European Union Recovery Fund as some criteria such as how it would be financed, either by grants or loans, was still being discussed.

Regarding the possibility of accessing the European Stability Mechanism, the source said that a “decision will be taken on the basis of common interest.”

Sources told Reuters last week that Spain was planning to avoid using cheap European Union bailout funds in all but a worst-case scenario. According to a Reuters calculation based on public comments and information from sources, Spain needs about $130 billion in its fight against the coronavirus pandemic and its economic consequences.

On Thursday, Spain issued a total of 6.9 billion euros of bonds in three-year, five-year, 10-year and 2066 lines to strong demand, particularly in the two shorter-term bonds.

Spanish 10-year bond yields inched higher too by 4 bps at 0.75%.

$1 = 0.9088 euros Reporting by Inti Landauro, Jesus Aguado and Emma Pinedo; Editing by Alison Williams and Andrew Cawthorne