UPDATE 1-Italy's Intesa Sanpaolo issues $1.5 bln dual tranche bond, orders top $9 bln

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MILAN, May 25 (Reuters) - Intesa Sanpaolo on Monday issued a dual tranche TIER2 dollar-denominated bond for $1.5 billion, the Italian lender said in a statement on Tuesday, returning to the U.S. market after a two-year absence.

The bond, in two tranches of $750 million with maturities in 2032 and 2042, attracted orders worth more than $9 billion.

The yield on the 2032 paper was set at 260 basis points over the Treasury yield and at 275 basis points over the Treasury yield for the tranche due 2042.

Fund managers bought 78% of the issuance, while insurance companies and hedge funds took 5% each.

Barclays, Credit Suisse, Goldman Sachs, HSBC, JP Morgan, Morgan Stanley and Nomura were bookrunners for the issue, while Intesa Sanpaolo’s IMI CIB was financial advisor. (Reporting by Gianluca Semeraro, writing by Cristina Carlevaro; Editing by Kirsten Donovan)