LONDON, Jan 21 (Reuters) - France was on track on Tuesday to see record demand for its first syndicated government bond sale since a snap election last year unleashed turmoil on its markets, according to a lead manager.
The deal will add to a sense of calm in the country's bond market, after Prime Minister Francois Bayrou passed the first test of his new government last week.
Investors put in over 100 billion euros ($103.53 billion) of orders for the new bond, which matures on 25 May 2042, a lead manager memo seen by Reuters said. This would be a record if the demand holds up by the end of the bond sale later on Tuesday.
The bond will price at a spread of 8 basis points (bps) over France's outstanding bond due May 2040, the memo said, down from around 10 bps when the sale started earlier in the day.
In syndications, governments hire banks to sell bonds directly to investors, allowing them to issue larger amounts and reach a wider investor base.
Tuesday's deal is France's first syndicated bond sale since May, according to LSEG data, before President Emmanuel Macron's snap election call on June 9 rocked the country's bond market.
But France has continued issuing bonds regularly through auctions.
The risk premium France pays for 10-year debt over safer Germany's was around 80 bps on Tuesday, down from the highest since 2012 at around 90 bps late last year, when the previous government collapsed.
($1 = 0.9659 euros)
Reporting by Yoruk Bahceli; Editing by Dhara Ranasinghe
Source: Reuters