* ThyssenKrupp shares fall 5 percent
* Gearing rises in Q3, could breach covenant on undrawn loan
* ThyssenKrupp to ask banks for waiver of gearing covenant
FRANKFURT, Aug 14 Shares in ThyssenKrupp fell on Wednesday as the steelmaker's deteriorating finances and failure to sell its loss-making Steel Americas division fanned investors' concerns that it will have to raise capital sooner than planned.
Germany's largest steelmaker late on Tuesday reported a 362 million euro net loss for its financial third quarter and said its equity was shrinking, putting it at risk of losing a credit line and raising pressure on the company to sell new shares.
"With the Americas seemingly stalling, and risk of the company attempting a capital increase without clarity on this issue, we have increased our short-term sense of caution," Credit Suisse analyst Michael Shillaker said.
ThyssenKrupp shares were down 5 percent at 16 euros ($21) at 0815 GMT, making them the second-biggest decliner on Germany's blue-chip DAX index.
ThyssenKrupp has been trying for more than year to find a buyer for the mills in Brazil and the U.S. state of Alabama, together called Steel Americas, which have caused losses and sapped capital at the company.
By the end of June, its gearing ratio - how much debt it has compared with equity - had jumped to 185.7 percent from 148.2 percent. That compares with only 31 percent at ArcelorMittal , the world's biggest steelmaker.
If ThyssenKrupp's gearing remains above 150 percent at the end of its financial year in September, banks could cancel a 2.5 billion euro undrawn credit line because the group would be in breach of loan covenants.
ThyssenKrupp said it would ask the banks that granted the credit line, which include Commerzbank and BNP Paribas , to waive the covenant.
ThyssenKrupp tried to allay investors' concerns over its financial strength, saying that even if banks cancelled the credit line, which it said was unlikely, it would still have enough liquidity to cover debt maturities.
Its liquidity, in the form of cash and undrawn credit lines, declined to 7.2 billion in the quarter to June from 8 billion euros in the previous three months. Gross financial liabilities repayable through September 2014 are 2.1 billion euros.
($1 = 0.7555 euros) (Reporting by Maria Sheahan; Editing by Erica Billingham)