has acquired preferred shares in Japanese investment bank Resona Holdings.
The New York brokerage firm agreed to purchase ¥350 billion, or $3 billion, in convertible preferred securities in the bank, according to a filing with the
Securities and Exchange Commission
A Merrill spokeswoman declined to comment and Resona executives were unavailable for comment.
The Merrill funds will help the Japanese bank, the fourth largest in the market, repay public debt. Resona will pay a 0.93% dividend, according to a release on Resona's Web site.
According to Merrill's filing, the broker doesn't view the investment with an eye toward eventual ownership.
Punk Ziegel analyst Richard Bove says the deal is a straight financing play.
"Merrill bought the deal with the intention of selling as much of it as the firm can to other buyers," he says in a research note. "The deal is structured in this fashion to allow Resona to get its money upfront no matter how successful or unsuccessful Merrill is in reselling the stock to permanent holders."