UPDATE 1-Allied Irish bond swap provides $1.4 bln equity gain

* Ups equity by 1 billion euros ($1.4 bln) through bond swap

* Looking to raise 1.5 bln euros above 3.5 bln state help

(Adds analyst comment)

DUBLIN, June 22 (Reuters) - Allied Irish Banks (ALBK.I) has raised 1 billion euros ($1.4 billion) of capital by exchanging bonds worth 2.4 billion euros for a new issue of 1.3 billion, it said on Monday.

"The securities will be exchanged for between 50 percent and 67 percent of their face value in line with the previously announced exchange prices," it said in a statement. "The equity accretion for AIB Group arising from the exchange offers is expected to be circa 1 billion euros."

Allied Irish earlier said it needed to raise an additional 1.5 billion euros in capital on top of a 3.5 billion state injection of funds this year due to its exposure to soured property loans.

A potential disposal of its stake in U.S. bank M&T Bank Corp (MTB.N) would generate an additional 300 million euros, leaving Allied Irish only 200 million short of the 1.5 billion target, said Ciaran Callaghan, analyst at NCB Stockbrokers.

"This raises the prospect that ... the group may raise its planned 1.5 billion (by) the end of 2009 without having to sell its prized Polish asset BZ WBK BZWB.WA," Callaghan said.

Allied Irish will also participate in Ireland's National Asset Management Agency, a "bad bank" scheme to take over up to 90 billion euros of risky loans from Irish banks.

Allied Irish might have to write down 6 billion euros on an estimated 30 billion of assets that it will hand over to NAMA at a discount, said Scott Rankin, analyst at brokerage Davy.

That writedown would knock the bank's core equity ratio so low that even after disposing of assets in both the United States and Poland it would likely end up below the level required by regulators, Rankin said.

"Assuming a minimum requirement of say 5 percent, Allied Irish would need to raise 1.3 billion of equity," he said. "If the provider of this capital was the Irish government, rather than existing shareholders, this would give it a stake of 51 percent."

Shares in Allied Irish, in which the government holds a 25 percent indirect stake, dropped 3 percent to 1.94 euros by 0832 GMT, underperforming a 0.8 percent weaker Irish market .ISEQ (Reporting by Andras Gergely; Editing by Rupert Winchester)