E*Trade priced a stock and debt exchange offers on Friday as it seeks to raise about $1.4 billion to boost its equity capital.

The stock offering of 435 million shares at $1.10 per share will close on June 24, 2009. It is expected to raise gross proceeds of $478.5 million.

The exchange offer, expected to raise about $1 billion for Class A and Class B convertible shares due 2019 will be priced at $1.034 and $1.551 per share respectively. The exchange offer begins on June 22.

Underwriters have the option of purchasing up to an additional 65 million shares of common stock. The proceeds will be used to provide additional equity capital, primarily for E*Trade Bank and secondarily for other corporate uses, the company said.

J.P. Morgan Securities inc and Sandler O’Neill & Partners, L.P. are joint book-running managers and E*Trade Securities LLC is co-manager of the offering.