Spain will guarantee bond sales by its banks for as long as five years under a €200 billion programme to encourage lending, according to three people with knowledge of the plan.

Spain will back banks' new senior unsecured debt for as many as three years under normal circumstances and five years in exceptional cases, said the people, who declined to be identified before the plan is made public.

Primary bond dealers were briefed on the plan on November 5th by Treasury officials and details may be announced next week, they said. - (Bloomberg)