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MILAN (Reuters) - UniCredit (CRDI.MI) priced its 13 billion-euro ($14 billion)rights issue at a 38 percent discount on Wednesday as it prepared to launch Italy's biggest ever share sale in a move to rebuild its balance sheet.
Sources told Reuters last month the lender was expected to offer the shares at a discount of between 30 and 40 percent.
UniCredit, Italy's only globally systemically important bank, is selling new shares to offset bad-loan writedowns and other losses and shore up capital to allow it to boost profits and dividends.
Italy's biggest bank by assets said it had priced its rights issue at 8.09 euros per share, offering 13 new shares for every 5 shares owned. That implied a discount of around 38 percent to the so-called theoretical ex-rights price.
The offer, underwritten by a banking syndicate that will mop up unsubscribed shares, will kick off on Monday and close before March 10, it said.
UniCredit, led by French banker Jean-Pierre Mustier, unveiled its bumper rights issue last December in a plan that also included job cuts, asset sales and the disposal of 17.7 billion euros in bad loans.
The lender said its plan to speed up the reduction of its non-performing loan portfolio through a sale into vehicles managed by Pimco and Fortress was moving into execution phase, which would conclude this year.
UniCredit also confirmed targets contained in its 2016-2019 strategic plan, including a fully-loaded Common Equity Tier 1 ratio - a key measure of financial strength - of more than 12.5 percent in 2019.
The lender said earlier this week it would fall short of European Central Bank capital requirements in 2016 but added the deficit would be fully restored after the rights issue.
It also said it expected to book a net loss for 2016 of around 11.8 billion euros due to one-off charges.
Reporting by Stephen Jewkes; editing by Andrew Roche