* Final subscription price is 93 DKK
* 10.3 percent discount to Monday's close
* Danske hopes for ratings boost, lower funding costs
* Shares down 3.9 pct vs steady European market (Adds analyst comments, updates shares)
By Mia Shanley
COPENHAGEN, Oct 31 Danske Bank, Denmark's biggest lender, has bolstered its finances with a 7.15-billion-Danish crown ($1.2 billion) share sale aimed at bringing its borrowing costs down into line with Nordic peers.
The sale of new shares was priced at 93 crowns apiece, a more than 10 percent discount to the closing price of 103.70 crowns on Monday before the offering was announced.
Danske said the sale, completed within 24 hours, was oversubscribed. At 1415 GMT, its shares were down 3.9 percent at 90.3 crowns, within a steady European blue-chip index.
Denmark is the weak point of the Nordic region, on the edge of recession, with its banks stung by debts from a burst property bubble and writedowns on loans to struggling farmers.
Danske, which has also been hit by its exposure to bailed-out Ireland, had its credit ratings cut as recently as May.
The bank said on Wednesday it hoped the fresh injection of capital would improve its credit ratings and bring funding costs down to levels more in line with Swedish rivals.
"In a longer perspective, this should be quite positive for Danske, to have this in place. The ratings discussions in the quarters to come will be easier with 7 billion on the books," said Sydbank analyst Bjorn Schwarz.
In May, ratings agency Moody's slashed the bank's long-term rating to Baa1. Standard & Poor's cut its rating to A-/A-2.
Handelsbanken Capital Markets analyst Matti Ahokas said the discount probably reflected surprise among investors, though it was not as steep as he had feared.
"It was a fairly low discount, so the price they actually got was good," he said.
Last year Danske raised 20 billion crowns from a rights issue in which it sold shares at a 29 percent discount.
Danske appointed a new chief executive earlier this year and on Tuesday announced a plan to cut a further 1,000 jobs and to triple its return on equity by 2015.
Danske said the new shares represented around 8.3 percent of its registered share capital before the offering and would account for about 7.6 percent after the capital increase.
On Tuesday, Danske said that the share offering, run by Danske and Morgan Stanley, would be made as a private placement to institutional investors.
Its biggest shareholders, AP Moller Maersk Group and a Moller Foundation, Realdania and Cevian Capital, planned to subscribe to the offering, taking up a number of shares in proportion to the stakes they already held.
No details about the participants in the share issue were provided on Wednesday.