UPDATE 2-Camfin cuts debt with Pirelli exchangeable bond


* Fixed-rate bond raised 150 mln euros

* Bond exchangeable into Pirelli shares

(Updates with bond's terms, share prices)

MILAN, Oct 12 (Reuters) - Italian holding company Camfin, which controls Pirelli , has sold awell-received 150 million euro ($194 million) bond exchangeableinto the tyremaker's shares.

Camfin will use 132 million euros to repay debt due at theyear-end, and the rest to invest in a rescue deal approved onThursday by loss-making real estate group Prelios inwhich Camfin has a 14.8 percent stake.

The five-year bond marked a victory for Pirelli chairmanMarco Tronchetti Provera after a feud with Camfin shareholderMalacalza Investimenti which had opposed the bond issue andwanted a capital increase to repay Camfin loans.

Pirelli shares, up 36 percent this year, were down 0.8percent to 8.78 euros by 1320 GMT, while Camfin shares were down4.4 percent to 0.4690 euro.

The bond's coupon is 5.625 percent, and the exchange pricewill be set at a 30 percent premium.

"The market was very receptive," said a person familiar withthe matter. "The entire thing took less than an hour."

Banca IMI , BNP Paribas and UniCredit

were joint bookrunners and joint lead managers.

Camfin said on Friday that Malacalza Investimenti's threeboard members had resigned after having filed a lawsuit againstCamfin on Oct. 9, adding it expected no impact on the bond issuefrom the legal action.

Malacalza Investimenti acquired a 12 percent stake in Camfinin 2009, becoming its second-largest shareholder and signing ashareholder pact with Tronchetti Provera. That pact now looksunlikely to be renewed.($1 = 0.7726 euro)

(Reporting by Jennifer Clark and Gianluca Semeraro; Editing byDan Lalor)

(jennifer.clark1@thomsonreuters.com; +3902 66129422)

Keywords: CAMFIN BOND/

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