(Updates to add investor quote, market comment)
LONDON, June 24 (Reuters) - U.S. auto giant General Motors Corp. plans to launch a multi-tranche bond sale later this week, as part of a $13 billion fundraising effort to cover pension shortfalls, bankers and investors said on Tuesday.
Initial price talk suggests GM plans to sell a 10-year dollar bond priced to yield around 400 basis points over U.S. Treasuries, a 20-year dollar bond priced at 400-412.5 basis points over 30-year Treasuries, and a 30-year dollar bond at 412.5-425 basis points over Treasuries, a European investor said.
In euros, the company plans to sell a 10-year bond at mid-swaps plus 350-362.5 basis points, and a 30-year bond at mid-swaps plus 387.5-400 basis points, the investor and bankers said.
GM may also sell a sterling bond, with a maturity of 12-13 years or longer, the investor said. These tranches are expected to total $6.5 billion.
Finance unit General Motors Acceptance Corp. also plans to sell $3 billion in debt, split into a three-year dollar bond at 300-312.5 basis points over Treasuries, a two-year euro-denominated floating-rate note priced at 225 basis points over Euribor and a five-year euro bond priced to yield 312.5 basis points over swaps, the sources said.
GM also plans to sell convertible debt.
GUIDANCE SEEN AS GENEROUS
"The guidance is generous compared to the outstanding issues, but it's a big tranche to get away," the investor said.
Bonds of automakers have come under pressure in recent sessions as the prospect of supply has weighed on the market.
Auto bonds started to stage a recovery during Tuesday afternoon, however, traders said, with Volkswagen AG some three to four basis points tighter from the day's lows and Ford Motor Credit Corp debt some 10 basis points tighter.
GMAC bonds were unchanged in Europe after the price guidance was released, having fallen in value in early trading.
Both Moody's Investors Service and Fitch Ratings have moved GM's credit ratings into the triple-B category -- the lowest investment-grade bracket -- in recent weeks, citing concerns over the hole in the company's pension fund. Standard & Poor's downgraded GM to BBB last October.
Bankers at global coordinators Morgan Stanley and Merrill Lynch were unavailable for comment on Tuesday.