* Spain sells larger-than-expectd 6.6 bln euros of bonds * Flood of issuance weighs on market, yields rise * Greek uncertainty keeps Bunds near record highs By Kirsten Donovan LONDON, Jan 19 (Reuters) - Spanish bond yields rose on Thursday as the market tried to digest a larger-than-expected debt auction which left the sovereign well ahead of its issuance schedule for the year. Spain sold 6.6 billion euros of bonds against a target amount of 4.5 billion after selling double the intended amount at a sale last week. With even the longer-dated 10-year paper on offer drawing solid demand hopes were raised that the European Central Bank's longer-term liquidity provision was helping to ease funding pressures on peripheral issuers. But secondary market yields rose, pushing the spread over German Bunds around 8 basis points wider on the day to 348 basis points as the market struggled to accommodate the large amount of new paper. "This puts them well ahead of their funding plan, this puts them in a comfortable position," said DZ Bank rate strategist Michael Leister. "It leaves the impression that they don't have the most positive market outlooks because otherwise they wouldn't be so eager to sell that much paper at the moment." Spain has now completed a fifth of its targeted 2012 funding. "They made a mistake this morning and left the market long after the auction, the management of these recent auctions has been pretty poor," said one trader. "They had better be confident they can hold these kind of bids from the domestics because the primary dealers are getting (hit)." France also found solid demand at an auction of shorter-dated debt, the first since Standard & Poor's stripped the country of its triple-A rating. The ECB's near half trillion euro injection of three-year funds has bolstered demand for shorter-dated euro zone debt, and analysts said it was positive to see the demand spreading to the longer-end of the Spanish curve. Bunds meanwhile, remained broadly supported near record highs with Greek debt talks, critical to avoid a disorderly default, dragging on. Greece meets its private creditors for a second day after the talks hit an impasse last week. It is crucial an agreement is reached within days to pave the way for Athens to receive further aid in time to redeem a 14.5 billion euro bond in March. Portuguese bonds have come under pressure since the country lost its last investment grade credit rating on Friday and with fears that any Greek deal could be used as a blueprint for Portugal despite officials saying Greece was a unique case. The spread of 10-year Portuguese bonds over German Bunds briefly touched a euro-era high of 1,293 basis points in early trade as yields rose more than 10 bps. March Bund futures were 29 ticks lower at 139.58 with benchmark 10-year yields 2 bps higher at 1.808 percent. "Bunds trade as if the market is short of decent quality assets," a trader said. "Therefore any blow-up and they are susceptible to quite a decent squeeze even at these levels." Austria is also in the market with a syndicated 10-year deal . Books have also opened on a 50-year deal, according to IFR, a Thomson Reuters service.

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