UPDATE 1-Spain launches private placement for regions fund
(Adds banks, Andalusia aid request)
MADRID, Oct 8 (Reuters) - Spain's Treasury will carry out a 4.86 billion euro ($6.3 billion) private placement to finance part of the country's regional liquidity fund, issuing bonds that will mature in 2015, 2016 and 2017, the Treasury said on Monday.
The southern region of Andalusia said it had sent a letter to Madrid on Monday formally requesting 4.9 billion in aid from the 18 billion euro ($23 billion)fund, which has little firepower left after six regions asked for help.
The private placement will launch on Oct. 11 and close on Oct. 17, the Treasury said. The deal follows a successful private placement in September.
Spain set up the regional liquidity fund this year to help the country's regions cover maturing debt costs. Spanish banks are expected to contribute 8 billion euros to the fund with the remainder coming from lottery funds and sovereign debt.
The country's biggest lenders Santander , BBVA
and La Caixa will contribute the lion's share of the loan to form part of the fund, banking sources close to the negotiations told Reuters in September.
Spain's 17 highly-devolved regions overshot deficit targets in 2011, and are expected to miss them again this year.
The Canary Islands were the latest region to request aid, asking for 757 million euros on Friday, leaving the fund with around 1.5 billion euros. ($1 = 0.7711 euros)
(Reporting by Clare Kane and Manuel Ruiz; Editing by Ron Askew)
Keywords: SPAIN TREASURY/