KTB/BONDS (URGENT)

BANGKOK, May 15 (Reuters) - Krung Thai Bank KTB.BK, Thailand's second-largest lender, said on Thursday it has priced coupons for its 10-year subordinated bonds worth up to 28 billion baht ($863 million) due to be issued next month.

The bonds would be divided into two tranches, one of them carrying fixed coupon rates with a coupon rate of 5.0 percent for the first five years and 6.5 percent for the remaining years, bank president Apisak Tantivorawong told Reuters.

The other tranche of floating rate bonds would offer 150 basis points over the bank's six-month fixed deposit rates, now 2.00-2.25 percent, for the first five years and 250 basis points over the deposit rates for the remaining years, he said.

"We will sell the bonds to the public in early June," Apisak said.

The proceeds of the issue would be used to boost the bank's Tier II capital by about 2.5 percentage points, taking its capital adequacy ratio to 17 percent from 14.6 percent, the bank has said.

At the midday break GMT, Krung Thai Bank shares were down 0.5 percent at 9.90 baht, while the Thai stock market .SETI was up 0.57 percent. ($1=32.45 Baht) (Reporting by Arada Therdthammakun; Editing by Louise Heavens)