May 22 (Bloomberg) -- UBS AG, burdened by the biggest losses from the subprime crisis, plans to sell new shares at a 31 percent discount to yesterday's closing price to double the amount of new capital raised from investors.

UBS will sell shares at 21 Swiss francs each to raise 15.5 billion francs ($15.1 billion), 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 earlier this month.

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.

``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 fell 30 centimes, or 1 percent, to 30.34 francs at 1:44 p.m. in Swiss trading, giving it a market value of 66 billion francs. The bank has gained 11 percent since the rights issue was 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 said investors are entitled to 7 new shares for each 20 held. It will be selling 760.3 million new shares in the rights offer, which are due to start trading on June 13.

``We expect to upgrade'' UBS's earnings per share estimate because the issue price is higher than the minimum 12 francs approved, wrote JPMorgan Chase & Co. analysts including Kian Abouhossein in a note to investors today. ``The subscription price has no impact on our valuation as the higher EPS is likely to be offset by a lower value of rights.''

Urged to Split

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, which UBS expects at about 16 billion francs.

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 08:23 EDT