Spain places 4.9 bln euros with banks to fund regions


MADRID, Oct 11 (Reuters) - Spain placed 4.9 billion euros($6.3 billion) of bonds with banks on Thursday, the EconomyMinistry said, to finance a liquidity fund set up to help thecountry's regions repay their debts.

Spain's 17 self-governed regions overshot deficit targets in2011 and are expected to miss them again this year. Reining inregional spending is key to getting the country's deficit undercontrol as it faces a full-scale international bailout.

The deal, which clears on Oct. 17, includes bonds maturingin 2015, 2016 and 2017 and follows a successful privateplacement in September.

Spanish banks have contributed 8 billion euros to the 18billion euro fund through the private placements with theremainder coming from 6 billion euros of lottery funding and a 4billion euro payout from the Treasury.

Top banks Santander , BBVA and Caixabank

will contribute the main part of the banks' componentof the fund, sources told Reuters in September.($1 = 0.7726 euros)

(Reporting By Sonya Dowsett; Editing by Fiona Ortiz, Ron Askew)

((sonya.dowsett@thomsonreuters.com)(+ 34 91 585 8328)(ReutersMessaging: sonya.dowsett.thomsonreuters.com@reuters.net))

Keywords: SPAIN FUND/

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