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 a well-received 150 million euro ($194 million) bond exchangeable into the tyremaker's shares.

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

The five-year bond marked a victory for Pirelli chairman Marco Tronchetti Provera after a feud with Camfin shareholder Malacalza Investimenti which had opposed the bond issue and wanted a capital increase to repay Camfin loans.

Pirelli shares, up 36 percent this year, were down 0.8 percent to 8.78 euros by 1320 GMT, while Camfin shares were down 4.4 percent to 0.4690 euro.

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

"The market was very receptive," said a person familiar with the 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 three board members had resigned after having filed a lawsuit against Camfin on Oct. 9, adding it expected no impact on the bond issue from the legal action.

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

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

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

Keywords: CAMFIN BOND/