Banks, EU – Baltic States, Financial Services

Nordea, the Nordic region's biggest bank by value, said on Wednesday shareholders would have the right to 11 new shares per 20 existing shares at a price of 1.81 euros.

Echoing moves by rivals Swedbank, SEB and Danske, Nordea had said in February it would tap shareholders for cash to help ride out the economic storm.

Finnish insurer Sampo said on Wednesday it had raised its stake in Nordea to 15.0% from 13.8% at the end of last month and could buy more.

"We have always indicated that if the price is right we could raise our stake," Sampo spokesman Jarmo Salonen said. "It could very well be that we raise our stake (further)."

Sampo has said it has no plans to bid for Nordea, whose stock is down near levels last seen in mid-2003.

Nordea's biggest shareholder is the Swedish state with a 19.8% holding. The centre-right government has said it wants to sell these shares though the time is not right.

At 1.81 euros, 20.75 Swedish crowns and 13.49 Danish crowns per new share, Nordea's rights issue was priced at a 44% discount to the theoretical ex-rights price adjusted for the proposed dividend, based on the March 10 closing price.

Nordea shares were up 4.0% at 50.00 Swedish crowns by 1120 GMT, with a Nordic banking index up 5.8%.

Christian Hede, an analyst at Jyske Bank in Copenhagen, said the issue had been priced roughly as expected and was in line with the discount offered by SEB.

"They want to be absolutely sure these shares will be taken," he said. "With the development we have seen in the market ... it is not unlikely that Nordea shares could be 10-15% lower in a couple of months' time without anything happening (at the bank)."

Banks across the globe have rushed to boost their capital buffers in recent months amid rising loan losses and continued macroeconomic uncertainty.

Nordea's move follows Swedbank's 12.4 billion crown rights issue late last year and the 15 billion crowns in new capital that SEB plans to raise.

Like global peers, Nordic banks have also sought other ways to bolster their balance sheets.

Swedbank, which has seen its share price pummelled by worries over its exposure to the recession-hit Baltic region, said this week it had dropped plans to pay a dividend for 2008.

SEB, also heavily exposed to the Baltic, will not pay a dividend either, while Nordea and Sweden's Handelsbanken cut their 2008 dividends.

Nordea's cash call is subject to shareholder approval at a meeting on March 12. The subscription period will run from March 20 through April 3.