UPDATE 1-St Petersburg bank to raise $150 mln in prefs-source

* Marketing starts after two weeks, pricing by end Nov

* Bank plans to convert into prefs up to $100 mln of debt

(Adds quotes, details, changes source)

MOSCOW, Oct 26 (Reuters) - St Petersburg Bank (BSPB.MM) plans to raise up to $150 million selling additional preference shares and will convert into preference stock up to $100 million of debt, a source close to the deal told Reuters on Monday.

"We plan to start a marketing for the new issue after (the) next two weeks and the pricing is expected by the end of November," the source told Reuters.

The bank, ranked among Russia's Top 30 in terms of assets, is struggling with losses as provisions for bad loans consume its profits and put pressure on its capital, while Russia's economy suffers its first contraction in a decade. [ID:nLO23641]

The price and the other terms and conditions of the issue will be set by the end of November, Vedomosti business paper reported on Monday. Existing shareholders who provided subordinated loans to the bank will likely be the core buyers of the new shares.

The bank secured two subordinated loans worth of $100 million from shareholders and at least $50 million of this debt will be converted into preferred shares.

The rest of the additional share issue will be listed and sold on the open market.

"The aim is to raise up to $150 million through the market placement and we consider that this task may be achieved," the source told Reuters.

VTB Capital and Renaissance Capital have been picked as bookrunners for the deal.

Preferred shares will bear an annual yield of 13.5 percent and will be converted into common shares in March 2013. (Reporting by Dmitry Sergeyev; Editing by David Holmes)