MILAN, Jan 9 (Reuters) - Italy's UniCredit on Tuesday raised 1 billion euros ($1.1 billion) in subordinated, or Tier2, debt, drawing nearly three times that amount in orders as it joined a rush of start-of-the-year debt issuance.

Bankers and investors had told Reuters in December that Italian issuers were expected to tap into healthy demand in early 2024 with corporate borrowers making up for a slow 2023, when high rates curbed issuance.

Smaller peer BPER Banca on Tuesday launched its first Additional Tier 1 (AT1) bond, the riskiest type of bank debt which counts towards lenders' Tier 1 capital, after privately placing its only previous issue in 2019.

UniCredit last sold Tier2 debt in euros in January 2020, pricing a 12-year bond which it could redeem after seven years at 280 basis point over the seven-year swap rate.

The latest bond also pays a 280 basis point spread over the equivalent swap rate, but it has a maturity of 10.25 years and can be called by the issuer after 5.25 years.

Holders of a bank's Tier2 debt rank below senior bondholders in the event of a default but before investors in AT1 debt, which is a semi-equity capital instrument.

In November, when it affirmed UniCredit's senior debt at Baa3, credit ratings agency Moody's cut the subordinated debt to Ba1 from Baa3, citing lower-than-expected issuance of AT1 paper - meaning subordinated bondholders are more exposed to potential losses.

The AT1 market suffered a shock last year when holders of Credit Suisse's AT1 debt were wiped out in the Swiss bank's rescue. It started thawing only in late 2023.

In June, UniCredit obtained supervisory approval to redeem a 1.25 billion euro AT1 bond without replacing it thanks to its strong capital position.

CEO Andrea Orcel told a conference then the bank would not issue more AT1 debt until the market stabilised. ($1 = 0.9148 euros) (Reporting by Valentina Za, editing by Sharon Singleton)