UPDATE 1-Thai Bank of Ayudhya sets $617 mln bond coupons-funds

BANGKOK, May 16 (Reuters) - Thailand's Bank of Ayudhya BAY.BK, 35 percent owned by a unit of General Electric (GE.N: Quote, Profile, Research), has priced coupons for a bond issue of at least 20 billion baht ($617 million), two fund managers said on Friday.

Thailand's fifth largest bank will offer two-year bonds with a coupon rate of 4.25 percent and a three-year issue will carry a 4.50 percent coupon, the fund managers close to the deal told Reuters.

An official at Bank of Ayudhya said the bank set a coupon range of 4.15-4.25 pct for the 2-year bonds, and a coupon range of 4.40-4.50 pct for the three-year.

Bank of Ayudhya said in a filing to the Securities Exchange and Commission it would offer up to 15 billion baht of two-year bonds and up to 5 billion baht of three-year bonds.

"If demand is strong, we will issue a greenshoe option but have yet to decide how much it should be," an executive at Bank of Ayudhya said, referring to its greenshoe option of up to 10 billion baht.

Benchmark two-year government bonds THLB104A= yielded 3.80 percent in the secondary market on Friday, three-year bonds THLB11NA= yielded 3.95 percent.

The bonds, which would be used for loan expansions, would be sold to institutional investors next week and open for subscription to the public between May 26 and June 4, the statement said.

The bank's last 20-billion-baht bond issue in February had a coupon of 3.85 percent for 2-year bonds and a 4.00 percent coupon for 3-year bonds.

By 0950 GMT, Bank of Ayudhya shares were up 3.8 percent at 27.0 baht, while the main Thai index .SETI was up 1.7 percent. ($1=32.45 Baht) (Reporting by Arada Therdthammakun; Editing by Anshuman Daga)