May 22 (Bloomberg) -- UBS AG, burdened by the biggest losses from the subprime meltdown, plans to double the amount it raises from investors after selling 16 billion Swiss francs ($15.5 billion) of stock at a 31 percent discount.

The shares will be sold at 21 francs each and investors are entitled to seven new shares for each 20 held, the Zurich-based bank said today in a statement. The discount compares with a 46 percent markdown offered by Royal Bank of Scotland Group Plc in April and a 48 percent discount for Bradford & Bingley Plc's capital increase.

``UBS has the advantage over the U.K.'' in that U.S. investors are able to buy shares, said Matthew Clark, a London- based analyst at Keefe, Bruyette & Woods who has an ``underperform'' rating on the stock.

The Swiss bank, which already got a 13 billion-franc capital injection this year, aims to repair its balance sheet after about $38 billion in subprime-related writedowns and 25.4 billion francs in net losses since July. Banks worldwide have raised about $270 billion to shore up capital.

UBS rose 1.1 percent to 30.98 francs in Swiss trading, giving it a market value of 67.5 billion francs. The bank has gained 13 percent since plans for the rights offer were announced on April 1. It's still down 59 percent over the past 12 months.

Credit Agricole

Credit Agricole SA, France's third-biggest bank, said last week it plans to raise 5.9 billion euros ($9.3 billion) in a rights offer to replenish capital after first-quarter profit fell 66 percent.

UBS will be selling 760.3 million new shares which are due to start trading on June 13. The bank had set itself a limit of 1.25 billion shares. It expects net proceeds of about 15.5 billion francs from the sale.

``The amount raised is slightly higher than the 15 billion francs originally indicated,'' said Peter Thorne, a London-based analyst at Helvea with an ``accumulate'' rating on the stock. ``Lots of UBS investors are in it because they thought it was a safe financial growth stock and in the last few months it's become a recovery basket case, so a lot of them won't take up the offer.''

UBS got shareholder approval for its rights offering at the April 23 annual meeting, which also saw Chairman Marcel Ospel step down and his replacement, Peter Kurer, elected to the board. Switzerland's biggest bank is resisting proposals from shareholders, including former UBS president Luqman Arnold, to split off the investment-banking unit and sell divisions such as asset management and Brazil's Pactual to raise capital.

The offer is fully underwritten by JPMorgan, Morgan Stanley, BNP Paribas SA and Goldman Sachs Group Inc., UBS said. The banks will get an underwriting fee of 1.65 percent of gross proceeds.

UBS said earlier this month it expects the core Tier 1 capital ratio to increase to 11.8 percent from 6.9 percent at the end of March, after the rights offer and the bank's April sale of 1.6 billion francs in hybrid bonds.

UBS plans to publish a prospectus for the share sale tomorrow.

To contact the reporters on this story: Elena Logutenkova in Zurich at elogutenkova@bloomberg.net; Warren Giles in Geneva at wgiles@bloomberg.net

Last Updated: May 22, 2008 11:58 EDT