* Country to buy back dollar bonds, issue new euro debt

* Second such tender this year

* Widens pool of bonds eligible for ECB purchase

* ECB purchases lagging in Slovenia and other states

By John Geddie

LONDON, Aug 24 (Reuters) - Slovenia’s borrowing costs touched a new record low on Wednesday after the country announced a debt management plan that will widen the pool of assets eligible for purchase by the European Central Bank.

In its second such exercise this year, Slovenia joins another of the bloc’s new members Latvia in buying back old dollar debt that is not eligible for ECB purchase and replacing it with new euro bonds.

This will help assuage concerns that the ECB is running out of Slovenian bonds to buy, while having minimal impact on the country’s overall debt levels.

Thomson Reuters’ markets news service IFR reported on Tuesday that Barclays, Deutsche Bank, Goldman Sachs and JP Morgan are arranging the tender which expires on Aug. 30.

Slovenia’s 10-year bond yields, an indication of the rate at which the country can borrow on financial markets, touched a record low of 0.731 percent early on Wednesday, before edging slightly higher on the day.

Most other euro zone bond yields were up Wednesday.

“These new bonds will be immediately absorbed by the central bank’s bond buying...and that is a strong supporting factor,” ING strategist Martin van Vliet said. “But even based on fundamentals, I think Slovenian bonds offer some good value.”

Funds have been investing in dollar debt from some of the euro zone’s newest members for some time in anticipation of these swaps, and are likely to have reaped handsome profits.

Latvia -- which joined the monetary union in 2014 -- did such an exercise in December last year, while Slovenia -- a euro zone member since 2007 -- swapped $1.25bn of dollar bonds for 1.25 billion euros of new euro debt in May. Lithuania, which joined in 2015 is also seen as a candidate for such a deal.

Before these countries joined the euro area, they found it more cost-effective to sell dollar debt that attracted a large number of global investors because it was eligible for emerging markets indices.

But since the ECB added government bonds to its 1.7 trillion euro stimulus scheme in March 2015, they have had an added incentive to make sure they have euro-denominated debt eligible for purchase.

ECB bond-buying is weighted to the size of each countries’ contribution to the central bank’s capital, but data in July showed that purchases of Slovenian, Slovakian, Lithuanian and Latvian debt were struggling to keep pace. It has stopped buying altogether in Estonia.

This comes against the backdrop of widespread concerns about bond scarcity that, if left unaddressed, could throw the ECB’s stimulus scheme off track.

For Reuters new Live Markets blog on European and UK stock markets see reuters://realtime/verb=Open/url=http://emea1.apps.cp.extranet.thomsonreuters.biz/cms/?pageId=livemarkets (Additional reporting by Francesco Canepa in Frankfurt; Editing by Toby Chopra)