(Adds relative value, funding target)
By Josie Cox and John Geddie
LONDON, April 9 (IFR) - The Republic of Austria, rated Aaa/AA+/AAA/AAA, on Tuesday mandated banks to manage the sale of a new 10-year benchmark euro bond.
The appointed banks - Barclays, Goldman Sachs, HSBC, Morgan Stanley and Raiffeisen Bank International - expect to launch the deal on Wednesday, if market conditions allow.
The syndicated deal comes in place of an auction that was scheduled for Tuesday.
One source close to the transaction said the new bond is likely to have an October 2023 maturity and will become the new Austria 10-year benchmark bond in place of the existing November 2022s.
That bond was bid at mid-swaps plus 2.5bp on Reuters just after the new mandate was announced.
Finland, which issued a new 10-year benchmark of its own on Tuesday, paid an 8bp premium to its outstanding 10-year.
If Austria's deal follows this pattern, final pricing is likely to come around mid-swaps plus 10bp.
Leads said price thoughts would be released on Wednesday morning.
Austria was last in the syndicated market with a EUR5bn dual-tranche issue in June 2012. In that sale, it priced a seven-year at swaps plus 42bp and a 32-year at swaps plus 100bp.
Austria plans to issue EUR20bn-EUR24bn in government bonds in 2013, which will include one or two syndicated issues, according to the Treasury's investor presentation. (Reporting by Josie Cox and John Geddie; Editing by Philip Wright)