UPDATE 4-Clariant boosts debt profile with convertible bond

* Strong demand sees size raised to 300 mln Swiss francs

* Convertible into 15 percent of share capital

* Conversion price set at 8.55 francs

* Sees improved profitability in Q2

* Shares down 8.6 percent

(Adds placement detail)

By Katie Reid and Emma Thomasson

ZURICH, July 2 (Reuters) - Clariant (CLN.VX) placed a 300 million Swiss franc ($279 million) convertible bond, more than initially planned due to strong investor demand and giving the Swiss specialty chemicals group greater financial flexibility.

The senior unsecured five-year issue carries a 3 percent coupon and will be convertible into around 15 percent of the group's outstanding share capital, Clariant said on Thursday.

Clariant had been aiming to raise 225 million francs.

The conversion price of 8.55 francs represented a 30 percent premium over the volume weighted-average price of the shares from launch to pricing, Clariant said, adding closing and settlement would be on or around July 7.

Finance director Patrick Jany said the deal was designed to improve Clariant's debt profile. "In addition to contributions from an expected continuing strong cash flow generation and an improved operating profitability in the second quarter, the proceeds from the transaction will also further enhance our financial flexibility," he said.

Clariant shares were down 8.6 percent at 6.36 Swiss francs at 1534 GMT, versus a 3.0 percent weaker DJ Stoxx European chemicals sector .SX4P.

Analysts saw Jany's comments about second-quarter performance as positive and welcomed the move to boost the balance sheet despite the future share dilution.

Sarasin analyst Oskar Schenker said the bond issue was a "good opportunity for investors to step in without taking too much risk".

A maker of pigments for products from textiles to cars, Clariant posted a first-quarter net loss in May, stung by a slump in demand for its products, but saw signs of improvement in coming quarters. [ID:nL6500959]