Germany's Lufthansa was set to raise 1 billion euros from the sale of three and eight-year bonds on Wednesday, according to a lead manager memo seen by Reuters, becoming the latest of several major airlines to tap the debt markets.

The three-year bond will price at a yield of 2.25% and the eight-year at 3.75%, and each tranche will raise 500 million euros ($590 million). The shorter tranche received demand of over 900 million euros and the longer one 1 billion, the memo said.

Among Lufthansa's peers, Air France-KLM, Easyjet, British Airways owner IAG and Ryanair have all sold bonds this year as COVID-19 vaccinations have supported a brighter economic outlook and better prospects for the travel sector.

Lufthansa will use the proceeds of its sale for general corporate purposes, according to an earlier memo, which said Citi, Credit Suisse, HSBC and ING were managing the transaction.

Reuters reported in May that the company was sounding out investors about a capital increase worth roughly 3 billion euros, looking at either a June/July or September/October window, after shareholders approved a potential hike of up to 5.5 billion. 

($1 = 0.8481 euros)

(Reporting by Yoruk Bahceli, editing by Kirstin Ridley and John Stonestreet) ((Yoruk.Bahceli@thomsonreuters.com; +44 20 7542 7571; Reuters Messaging: yoruk.bahceli@thomsonreuters.com))