Spain will raise 8 billion euros from a new 10-year bond later on Tuesday on the back of over 74 billion euros of investor demand, according to a memos from two lead managers seen by Reuters.

The bond, due Oct. 31, 2031, will price at a spread of 8 basis points above Spain's outstanding bond due Apr 2031 later on Tuesday, an earlier memo said, down from around 10 basis points when the sale started earlier in the day.

Demand is higher than the 55 billion euros Spain received for another 10-year debt sale in January. 

Spain also managed to avoid big swings that saw it lose a substantial part of the investor orders in its book when it cut the yield on offer on syndications in January and April.

The January sale, where more than half the orders dropped out, had spooked debt management offices across Europe, leading various issuers to start capping the orders they would consider from hedge funds, which bankers say place larger orders than they need to try and secure better allocations.

This is Spain's fourth bond issuance via syndication this year, after selling 10-year, 50-year and 15-year bonds in this format earlier in 2021.

A borrower hires banks to sell the debt directly onto end investors in a syndication, which helps raise a bigger amount and diversify its investor base.

European governments, which raise most of their funding through auctions, have made increased use of syndications to help fund their COVID-19 fiscal spending.

Prior to Tuesday's issuance, Spain had completed 50% of the debt issuance it expects for this year, according to Danske Bank.

It hired Barclays, BBVA, Citi, Credit Agricole, JP Morgan and Morgan Stanley to manage the deal on Monday.

(Reporting by Yoruk Bahceli; Editing by Philippa Fletcher and Bernadette Baum) ((Yoruk.Bahceli@thomsonreuters.com; +44 20 7542 7571; Reuters Messaging: yoruk.bahceli@thomsonreuters.com))