Márcia Francisco (asker) May 6, 2020:

@Mark @Luis It is also very confusing for me, but I believe it is a scheme in which the bank was selling shares in that company to a private investor, who would become a shareholder and increase the value of the company, and then the company would sell these at a higher value so that the private investor could settle the bank liabilities through the issuance of commercial paper.
However, I am not really sure of anything.

Mark Robertson May 6, 2020:

@Luis 1. "a empresa X alienaria títulos próprios a um preço..." - it is not mentioned that the bank would buy more shares, as you presume. I think the meaning is that the company would sell to third parties.
YOU ARE RIGHT.

2. The company does not need to issue new shares. It can sell treasury stock (treasury shares). Or other debt securities, since "ações" and "títulos are not necessarily the same thing (please see item 3 below).
I said that this applies IF acões and títulos are the same thing, and I do not think they are.

3. I understand "ações dessa empresa" and "títulos próprios" are not the same thing. There is a hyponym/hyperonym relation. I.e. "ações" (shares) is a type of "títulos" (securities). Please see my answer below. I agree, they are not the same thing.
BUT the problem is how would a bond issue by X garantir “ao banco, ENQUANTO ACCIONISTA, mais valias”, i.e. an increase of the X share price, as, for that, the bond price would have to fall.

There is a feasible scenario.
1. The bond issue (at a discount?) reduces the market price for X’s bonds because it inflates supply.
2. The fall in the bond price triggers an increase in the share price.

Luis Fernando Arbex May 6, 2020:

Dear Mark, just for the sake of argument, as we can only try to infer the rationale behind the short excerpt, I think there are some important issues in your train of thought.

1. "a empresa X alienaria títulos próprios a um preço..." - it is not mentioned that the bank would buy more shares, as you presume. I think the meaning is that the company would sell to third parties.

2. The comany does not need to issue new shares. It can sell treasury stock (treasury shares). Or other debt securities, since "ações" and "títulos are not necessarily the same thing (please see item 3 below).

3. I understand "ações dessa empresa" and "títulos próprios" are not the same thing. There is a hyponym/hyperonym relation. I.e. "ações" (shares) is a type of "títulos" (securities). Please see my answer below.

I don't know if this makes sense to you, but that's how I understand the text and the issues you raised. ;)

Mark Robertson May 5, 2020:

@All I cannot get my head round this one. Such as it is, my train of thought is:

The bank reduces its exposure to company X (i.e. to the risk of a decline of the Coy X share price) by selling some of its shares in Company X; Company X sells bonds/other debt-based securities, at a price, which boosts the value of the bank's remaining shares in Company X.
IMHO, it makes little sense for the bank to sell shares in company X in order to reduce its exposure and then to buy more shares. Also, if Company X issues more shares, the effect will be to reduce the share price, because any profits then have to be divided between a larger number of shares/shareholders. The existing shareholders will therefore be faced with a fall in the share price, not a gain. Also, why refer first to "ações dessa empresa" and then to "títulos próprios" if they are the same thing?

However, the relationship between share values and bond values is normally inverse. So, when share prices go up, bond prices come down and vice versa, which means it is difficult to see how a bond issue could raise share values. What have I missed?