Greece mandated five banks on Monday for a new benchmark seven-year bond, its first test of the market after a European-IMF debt support mechanism was agreed last week.

Greece, rated A2 by Moody's and BBB+ by Fitch and Standard & Poor's, has about 23 billion euros of bonds -- equating to nearly 10 percent of its entire economic output -- maturing between now and the end of May although the government could cover some of that with cash reserves.

The country, grappling with a 300 billion euro ($403 billion) debt pile that has shaken global markets, will need to raise at least 16 billion euros in new debt in the coming weeks to meet those obligations, its debt agency chief has said.

PDMA said it had mandated Alpha Bank, Emporiki Bank, ING, Bank of America Merrill Lynch and Societe Generale for the 7-year bond, its third syndicated issue so far this year.

Guidance on the bond which will be due April 20 2017, was set around mid-swaps plus 310 basis points, lead underwriters said.

The current Greek 7-year benchmark bond with a coupon of 4.3 percent is yielding 6.01 percent.

Before the announcement, the 10-year Greek/German yield spread tightened 4 basis points to 311 basis points, according to Tradeweb data.

(Reporting by George Georgiopoulos, editing by Mike Peacock)