* NBAD to issue 7-yr, benchmark dollar bond, books may close today - leads

* UAE bank picks Citi, JP, StanChart and itself for deal

* Initial price guidance at ms+200 bps area

* Rare August bond, hopes to take advantage of market conditions

(Adds quote, background)

DUBAI, Aug 6 (Reuters) - National Bank of Abu Dhabi

NBAD.AD , the largest lender by market value in the United Arab Emirates, picked four banks to arrange a benchmark-sized bond issue which could price within a day, lead arrangers said on Monday.

Initial price guidance for a seven-year, dollar-denominated deal has been given in the area of midswaps plus 200 basis points, with books closing as early as Monday, a document from the leads said.

While bond issuance in August is traditionally rare, with many in the finance sector away on vacations, the turbulent market conditions of recent months mean issuers are keen to take advantage of windows whenever they appear.

"In the dollar market, we hit significant volumes last week from some big names like American Movil so the market is hot right now," said one Gulf-based banker.

"I'm surprised they are doing it, especially as it's the middle of Ramadan so local investors will probably be asleep. However, the market is open right now for sure."

Much of the Middle East works reduced working hours during the Muslim fasting month of Ramadan, which began in the UAE on July 20.

NBAD mandated Citi C.N , JP Morgan JPM.N , Standard Chartered STAN.L and itself for the deal, which is its second dollar-denominated bond of 2012.

The bank's $750 million five-year 3.25 percent bond

AE076353140= , which launched and priced at 190 bps over midswaps on the same day in March, was bid at 103.4 cents on the dollar to yield 2.462 percent on August 6, according to Thomson Reuters data.

Last week, Abu Dhabi repaid a $1 billion sovereign bond and fund managers could possibly look for similar exposures to replace the maturity on their portfolio.

"Money from the Abu Dhabi sovereign bond that matured this week has started flowing into certain names, especially Abu Dhabi 2019 bonds, which tightened by around 25 bps last week," said a August 5 note from fund manager Invest AD.

(Reporting by Mala Pancholia and Rachna Uppal; Writing by David French; Editing by Amran Abocar)

((davidj.french@thomsonreuters.com)(+971 4 362 5864)(Reuters Messaging: davidj.french.thomsonreuters.com@reuters.net))

Keywords: EMIRATES NBAD/BOND