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General Motors unit to sell $2 bln notes Thursday

NEW YORK, Aug 21 (Reuters) - General Motors Corp.'s finance arm plans to sell $2 billion of five- and 10-year notes, an official for co-lead manager Banc of America Securities LLC said on Wednesday.

The sale, by General Motors Acceptance Corp., is expected on Thursday, people familiar with the sale said.

A sale would follow a six-session corporate bond rally, as investors seeking alternatives to low-yielding Treasuries snap up bonds from companies eager to raise cash at low yields. Companies have already sold more than $8 billion of bonds in the United States this week.

A trader said GMAC's 6.15 percent notes maturing in 2007 and 7 percent notes maturing in 2012 yield about 2.55 percentage points more than similar maturity U.S. Treasuries. New bond issues often yield 0.05 to 0.2 percentage points more than older issues with similar maturities. Five-year Treasuries yield 3.27 percent, and 10-year Treasuries yield 4.2 percent.

Moody's Investors Service rates GMAC's existing senior unsecured debt "A2," its sixth highest investment grade. Standard & Poor's Ratings Services rates it "BBB-plus," two notches lower. J.P. Morgan, Salomon Smith Barney and UBS Warburg LLC are also arranging the sale.