Swiss fund objects to being shut out of UBS issue

ZURICH, Jan 18 (Reuters) - A Swiss pension fund manager has added its voice to a chorus of complaints in Switzerland over being shut out of a capital increase by UBS UBSN.VX, before an emergency shareholders' meeting next month.

UBS announced last month that Singapore and an unidentified Middle East investor, believed to be Saudi Arabia, would make a 13 billion Swiss franc ($11.82 billion) capital injection through a mandatory convertible bond to help shore up the bank’s balance sheet.

“We want to participate in this capital increase,” Herbert Braendli, who heads Profond, a fund with 2.5 billion francs under management, told Reuters.

The fund said in a statement it holds 1 million shares in UBS, worth 43 million francs at current market prices. UBS shares closed at 43.20 francs on Friday.

Other major Swiss pension funds have called on UBS to let other shareholders subscribe to the capital increase but UBS has said it does not want to make a rights issue, which would be open to all shareholders.

UBS has said it will issue convertible notes to the new investors paying a coupon of 9 percent.

The bank, Europe’s biggest casualty in the U.S. subprime meltdown, announced the capital injection in December after unveiling $10 billion in writedowns on its subprime exposures. (Reporting by Andrew Hurst; Editing by Quentin Bryar)