UPDATE 1-Royal Bank Scotland unit sells A$1.085 bln bonds

(Adds pricing details, background)

SYDNEY, Dec 18 (Reuters) - The Australian unit of Royal
Bank of Scotland (RBS.L) has raised A$1.085 billion ($757.7
million) in one-year bonds, market sources said on Thursday.

The offer included three tranches, the sources said:

1) A$435 million of 364-day government-guaranteed floating
rate notes at 60 basis points over BBSW;

2) A$550 million of 364-day non-guaranteed fixed rate
certificates of deposit at 130 basis points over swap; and

3) A$100 million of 364-day non-guaranteed floating rate
notes at 130 basis points over BBSW.

The issuer, RBS Plc Australia branch, is rated AA- by S&P,
Aa1 by Moody's and AA- by Fitch.

The notes settle on Dec. 23.

Macquarie Bank, RBS and Westpac Institutional Bank jointly
led the offer.

RBS is the seventh bank in Australia to sell
government-backed bonds following a programme put in place last
month to guarantee all bond issues to help banks weather the
credit crisis.

It is also the first foreign bank to use the Australian
government guarantee. The programme allows foreign banks to use
the sovereign guarantee until Dec. 31 2009.

Banks in Australia have raised over $11 billion equivalent
in government-guaranteed bonds. Such bonds are rated triple A
by major ratings agencies.

For a factbox on Australian government-guaranteed bond
issues, see [ID:nSYD412195].
($1=1.432 Australian Dollar)
(Reporting by Cecile Lefort)