Switzerland’s UBS has begun to contact institutional investors in Europe and the US to market its SFr15 billion ($14.84 billion) rights issue ahead of its 23 April annual general meeting, according to media reports. The rights issue was announced more than a week ago as part of the Zurich-based bank's attempts to strengthen its finances after logging massive debt write-downs because of the global credit crunch. UBS says the recapitalisation will raise its Tier 1 capital ratio to 10.6 per cent, making it one of the world's best capitalised banks. Meanwhile, US investment bank Lehman Brothers said it expects second-quarter net profit for UBS to be close to zero due to a combination of any further write-downs, reversals of gains on own debt, and investment bank restructuring charges. Lehman has cut its price target on UBS to SFr36 from SFr40. Lehman kept its "underweight" rating on the stock, contrasting with the move earlier this week by US investment bank Morgan Stanley, which has moved from an “underweight” to “equal-weight” rating on UBS. Morgan Stanley argues that UBS is in a position to recover after so much bad news has already come out on the Swiss bank. UBS’s rights issue, which can be converted to as many as 1.25 billion new shares, has been underwritten by JP Morgan, Morgan Stanley, BNP Paribas and Goldman Sachs.