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Unibanco completes preferential stock swap

Bnamericas
Brazilian bank Unibanco (NYSE: UBB) has completed the second step in a preferential stock swap, which saw the conversion of 83% of the bank's preferential shares into "units," the bank said in a statement. One unit is equivalent to one Unibanco preferential share and one class B preferential share of Unibanco Holdings, Unibanco's parent. Last week Unibanco converted 1.25 billion preferential shares into 625 million "units," equivalent to 0.9% of the total capital of the bank. In the first stage of the operation, on September 22 this year, the bank converted 15.6 billion preferential shares into 7.8 billion "units." The bank's aim is to increase its liquidity on both the domestic and international markets, Fitch analyst Peter Shaw told BNamericas, adding that, "there is no downside to [the operation]." Unibanco is left now with 2.9bn reais of preferential shares in free float, or 2% of the bank's total capital. Unibanco's "units" increased in value year-on-year by 54% in the first ten months of the year, according to the statement, and in the third quarter "unit" transaction volume on Brazilian markets was 180% higher than the same year-ago period. Higher liquidity on stock exchanges usually makes a company's stock more attractive, because investors can buy and sell shares more quickly.

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