Spain hires Barclays to advise on listing of rescued bank BMN

MADRID, July 8 (Reuters) - Spain's bank restructuring fund,which oversees the state's holdings in bailed-out lenders, hashired Barclays to advise it on the stock market listingof rescued bank BMN, two sources with knowledge of the mattersaid on Wednesday.

BMN was one of several lenders that drew on a 41.3billion-euro ($45.6 billion) European aid package for Spain'sbanking sector in 2012, after it struggled to cope with soureddebts during the country's economic downturn, which ended in2013.

Formed in 2010 as an amalgamation of small regional savingsbanks, BMN is 65 percent owned by the government. It got a730-million-euro capital injection as part of its rescue and hadassets of 44 billion euros in 2014.

The state has to list the bank by the end of 2017 to meetthe conditions of the rescue.

Barclays will help the restructuring fund, known as FROB,analyse market conditions and find the right window for a listing that might include an initial public offering, thesources said. The mandate is for one year, and can be extendedby another, one of the sources added.

FROB declined to comment.

"One window (for the listing) could be right after thesummer, and there could be another one at the start of nextyear, but it will not necessarily come soon, it will depend onthe market," the second source said.

The pace of listings and corporate acquisitions in Spain islikely to slow in the run-up to a national election due by theend of this year, bankers say, as investors shy away frompossible market volatility.

The vote, which will probably take place in November, isshaping up to be one of the hardest to call in decades, asrelatively new parties with a significant share of support lookto shake up Spain's established two-party system.

Spain has struggled so far to recover most of the money itpumped into its ailing banks, and has privatised some at a loss.

The government has said its best chance of getting moneyback may be through Bankia, after it started thesell-down of its controlling stake in that lender last yearthrough the stock market and turned a small profit.

($1 = 0.9061 euros) (Reporting by Sarah White, editing by John Stonestreet)