(Adds price guidance, market reaction)
LONDON, Sept 22 (Reuters) - General Motors Acceptance Corp (GMAC), the financing arm of U.S. automaker General Motors , plans to sell 1.0 billion euros of three-year and 1.0 billion euros of seven-year bonds, lead managers said on Monday.
BNP Paribas, Deutsche Bank, UBS and WestLB have been mandated to manage the fixed-rate transactions, which will be launched as soon as possible.
A source close to the deal said it was expected to launch on Monday or Tuesday. Preliminary price guidance circulated early on Monday, with the three-year portion seen at 160-165 basis points over benchmark swaps and the seven-year bond expected at around 195 basis points over swaps, market sources said.
The transaction was setting the tone in the corporate bond markets, where existing bonds from GM and GMAC fell in value, traders said.
"The focus is the new issue from GMAC announced this morning," one trader said. "The market has opened up slightly better but we are trading pretty close to (historic) tight levels so much will depend on how the deal goes."
"There has been wide buying interest over the past few days but this GMAC has come in early on a Monday and is going to take a little while to digest -- then we can see how things go from there," said the trader.
Another trader said that while he expected little trouble with the sale, it had knocked outstanding General Motors paper. He quoted the company's 8.375 percent 2033 euro bonds three to five basis points wider at 299 basis points bid over Bunds.
"It's priced reasonably aggressively, but clients are looking to increase their exposure to the sector, so they can get away with it," he said of the price talk on the new bond.
However, he said the bond sale could be affected by the fact that issuance in the auto sector has been heavy of late.
GM's new deal comes on the heels of a 1.0 billion euro three-year offering from a unit of German auto giant DaimlerChrysler AG . That bond, sold on Friday, drew 3.3 billion euros in orders and traded up sharply after launch.
Earlier in the month, both Ford Motor Co. and PSA Peugeot Citroen borrowed in euros, raising 2.1 billion euros between them.
GM set bond market records earlier this year as it sold $17.6 billion in dollar, euro and sterling bonds, plus securities convertible into shares. The company was raising cash to plug a hole in its pension fund.
GMAC is rated A3 by Moody's Investors Service, BBB by Standard & Poor's and BBB+ by Fitch Ratings.
--Additional reporting by David Wigan in London.