By Walden Siew

NEW YORK, Feb 15 (Reuters) - General Motors Corp GM.N bondholders are pressing for favorable terms in a $27.5 billion debt-for-equity swap that is likely to take up to Tuesday's U.S. government deadline to finalize, a person familiar with the talks said.

The GM debtholders on a 10-member committee, including Franklin Templeton Investments, Fidelity Investment and Loomis Sayles & Co, remain in talks spurred by a requirement that the automaker reduce $27.5 billion in debt to about $9 billion by exchanging the debt for equity.

GM has received $9.4 billion from the U.S. Treasury and has been promised another $4 billion if it can demonstrate that it can be made viable by slashing costs and debt.

One concern is to provide enough incentives for bondholders to participate and avoid any major defections -- like PIMCO's departure on Dec. 15 from the committee involved in negotiating GMAC's now-completed, $38-billion debt swap -- said the person familiar with the negotiations.

One of the issues facing the bondholders has also been a demand by the U.S. Treasury that its loans to GM be given senior status above prior debt.

Resolving those "inter-creditor" claims is one of the questions GM has to address under a restructuring plan due Tuesday.

The GM bondholder negotiations have played out in parallel to talks between the automaker and its major union, the United Auto Workers.

Like bondholders, the UAW is being pressed to accept stock in a recapitalized GM in exchange for debt forgiveness.