UPDATE 1-Hungary launches $1.2 bln Richter bond offering

* Issue by national asset manager convertible in 2014

* Government to retain 25 pct stake in drugmaker

(Adds background, share price)

BUDAPEST, Sept 9 (Reuters) - Hungary's national asset manager (MNV) launched a 840 million euro ($1.22 billion) offering of bonds convertible into 4.68 million common shares in drugmaker Richter GDRB.BU, the company said on Wednesday.

The coupon on the bonds, due in 2014, is expected to be in the range of 4.40 to 4.90 percent, with an initial exchange premium of 27-32 percent over the volume-weighed average share price between launch and pricing, it said.

The state will continue to hold a stake of 25 percent plus one share in Richter.

The government said earlier this year it would issue new convertible bonds worth around 800 million euros before the end of September to pay off Richter bonds issued in 2004 and expiring on Sept. 28.

Pricing on the new bonds is expected on Sept. 9.

Richter shares traded at 36,995 forints ($198.3), down 2.64 percent, at 0721 GMT, while the benchmark BUX .BUX was down 0.8 percent.

($1=.6897 Euro)

(Reporting by Gergely Szakacs; Editing by Hans Peters, John Stonestreet)