June 5 (Bloomberg) -- Credit Agricole SA fell to the lowest in five years in Paris trading after pricing new shares below its 2001 initial stock offering to replenish capital wiped out by writedowns.

France's third-largest bank dropped 8 percent to 15.34 euros, the lowest since April 2003, after saying yesterday it will sell shares at 10.6 euros each, a 37 percent discount on the previous day's close. The Paris-based company sold stock for the first time in December 2001 at 16.6 euros.

``It's a very low price,'' said Pierre Chedeville, a Paris- based analyst at CM-CIC Securities who had estimated the new shares would be sold at 13 euros. ``It shows that the bank's profitability is durably weakened and the environment remains difficult,'' said Chedeville, who has a ``reduce'' recommendation on the stock.

Credit Agricole aims to raise 5.9 billion euros ($9.1 billion) to boost capital after announcing about 5.5 billion euros of asset writedowns since the start of 2007. The company last month reported a 66 percent drop in first-quarter profit after the credit crisis cut revenue at its investment bank.

The world's biggest financial companies, including Citigroup Inc., UBS AG and Merrill Lynch & Co., are raising about $283 billion to shore up their balance sheets after $386 billion of writedowns and credit losses since the start of the subprime crisis, data compiled by Bloomberg show.

`Difficult' Conditions

Credit Agricole has fallen 26 percent since the bank said on May 13 it was considering a rights offer, giving the company a market value of 25.6 billion euros.

``Market conditions have been very, very difficult for banks trying to raise capital,'' said Pierre Flabbee, a Paris- based analyst at Landsbanki Kepler who rates Credit Agricole a ``hold.'' ``There is saturation from investors.''

Investors can buy one new share for every three held in the rights offer. Calyon, Credit Agricole's investment-banking arm, is leading the sale of new shares, while Lehman Brothers Holdings Inc. and Morgan Stanley are also managers of the rights offer.

The company, set up in 1894 to provide financing for farmers, is owned by a group of regional banks, ranging from lenders in the French Caribbean to Normandy in northern France.

To contact the reporter on this story: Stephen Taylor in Paris at Staylor8@Bloomberg.net.

Last Updated: June 5, 2008 11:40 EDT