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* New issue in 'near future', possibly Wednesday
* Main step in planned return to full-market funding
* Ireland on course to be first euro zone country to exitbailout
By Stephen Mangan and Padraic Halpin
DUBLIN, March 12 (Reuters) - Ireland is to issue its firstnew benchmark 10-year bond since its EU/IMF bailout in the "nearfuture", its debt agency said on Tuesday, a landmark on itsroute to becoming the first bailed-out euro zone country returnto full market funding.
The National Treasury Management Agency (NTMA), which beganborrowing again from capital markets last year, had earmarked anew benchmark issue as its most significant step towards a fullmarket return ahead of regular bond auctions later this year.
One industry source said the books were expected to open onWednesday. The NTMA made a similar pre-announcement in Januarybefore it opened its five-year syndicated deal the next day.
The new bond, to mature in March 2023, will be Ireland'sfirst benchmark bond since soaring yields forced it to takerefuge in a 85-billion euro ($110 billion) bailout in 2010.
The notes will be issued through a syndicated transactionsubject to market conditions, with details to be announced in"due course", the NTMA said in a statement.
One industry source said the debt agency was expected toissue a minimum of 2.5 billion euros. A second industry sourcesaid it would likely be between 2 and 3 billion euros.
DEMAND SEEN STRONG
"It will be significantly well oversubscribed. There is alot of demand that had been waiting for the bond issuance forthe last number of weeks," said Ryan McGrath, a bond dealer atDolmen Securities, who said he expected to see yields somewherebetween 4.25 percent and 4.40 percent.
The head of the NTMA said regular auctions would probably beenough to see it qualify for the ECB's Outright MonetaryTransactions (OMT), a scheme the government has said it wouldlike to apply for in due course.
Dublin wants to have backstops like potentially unlimitedECB bond purchases and the availability of a conditional line ofcredit from official lenders in place as it exits its bailout tomake investors more comfortable to lend it money.
The ECB launched the OMT program last September to counterinvestor fears of a euro zone breakup but it has yet to deployit, with some policymakers at the bank preferring to keep itunder wraps.
ECB policymaker Benoit Coeure, who says the program is readyfor use, told Reuters last month that Ireland had not yetdemonstrated the regular market access deemed necessary forqualification and that Frankfurt needs to see issuance atdifferent points across the yield curve.
Ireland already is on course to get off support from the EUand IMF after raising over a quarter of its long-term fundingtarget for this year in January by selling 2.5 billion euros offive-year debt.
Its steady market return has been helped by a sharp fall inIrish bond yields over the past 18 months. Irish debt now tradesbelow the equivalent levels of Spanish and Italian governmentbonds, two fellow euro zone strugglers which have avoidedsovereign bailouts.
Yields on Ireland's current benchmark 2020 bond were little changed at 3.7 percent on Tuesdayafter falling last week on a pledge by European Union financeministers agreed to look at how to extend the maturity ofemergency loans Ireland and Portugal have received under theirbailouts.
In July 2011, the yield on the same bond had stood at morethan 15 percent.
The NTMA said it had mandated Barclays, Danske Bank, Davy stockbrokers, Goldman Sachs International, HSBC and Nomura as joint leadmanagers for the new 10-year bond.
