Popular Agrees With the U.S. Treasury to Exchange Outstanding Series C Preferred Stock for Newly Issued Trust Preferred Securiti
August 10 2009 - 8:00AM
PR Newswire (US)
SAN JUAN, Puerto Rico, Aug. 10 /PRNewswire-FirstCall/ -- Popular,
Inc. (the "Corporation") (NASDAQ:BPOP) today announced that, in
connection with its offer (the "Exchange Offer") to issue up to 390
million shares of its Common Stock in exchange for its Series A
Preferred Stock and Series B Preferred Stock and for the Trust
Preferred Securities referred to in the prospectus for the Exchange
Offer referred to below, the U.S. Treasury has agreed with the
Corporation that the U.S. Treasury will exchange all $935 million
of its outstanding shares of Series C Preferred Stock of the
Corporation for $935 million of newly issued trust preferred
securities (the "New Trust Preferred Securities"). The New Trust
Preferred Securities will have a distribution rate of 5% until
December 5, 2013 and 9% thereafter (which is the same as the
dividend rate on the Series C Preferred Stock). The sole asset and
only source of funds to make payments on the New Trust Preferred
Securities will be perpetual junior subordinated indebtedness
issued by the Corporation to the new trust. The Corporation expects
to complete the exchange with the U.S. Treasury promptly following
the completion of the Exchange Offer. At the Corporation's request,
the U.S. Treasury has agreed to this revised exchange, which
contemplates that the rate on the New Trust Preferred Securities
will be the same as the rate on the Series C Preferred Stock. The
U.S. Treasury agreed to the Corporation's request that the
distribution rate on the New Trust Preferred Securities be equal to
the dividend rate on the Series C Preferred Stock on the basis that
the new trust from which the New Trust Preferred Securities will be
issued will hold perpetual debt, which is not tax deductible by the
Corporation. The Corporation's agreement with the U.S. Treasury to
exchange the Series C Preferred Stock into newly issued trust
preferred securities is subject to certain closing conditions,
including the completion of the Exchange Offer and related
transactions causing the increase in the Corporation's Tier 1
common equity described in the prospectus for the Exchange Offer
and the completion of definitive documentation acceptable to the
U.S. Treasury. On June 29, 2009, in connection with the Exchange
Offer, the Corporation commenced a solicitation of written consents
of holders of shares of Series A and Series B Preferred Stock.
Because the U.S. Treasury has agreed to the Corporation's request
to exchange the Series C Preferred Stock for the New Trust
Preferred Securities, as described above, the Corporation is
terminating its consent solicitation of holders of Series A and
Series B Preferred Stock and holders are no longer required to
consent to validly tender shares of Series A and Series B Preferred
Stock. Subject to the terms of the Exchange Offer, including
satisfaction of the conditions thereof, shares of Series A and
Series B Preferred Stock that have been validly tendered and that
are not withdrawn prior to the expiration date of the Exchange
Offer will be accepted for exchange without regards to whether or
not they were accompanied by a consent, which consents (but not the
accompanying tenders for exchange) shall be null and void. The
Corporation is not further extending the expiration date for the
Exchange Offer, which is 11:59 p.m., New York City time, on August
20, 2009, and the Corporation does not expect that date to be
further extended. The terms and conditions of the Exchange Offer,
as set forth in the prospectus referred to below, are unchanged.
The lead dealer managers for the Exchange Offer are UBS Investment
Bank, which can be contacted at (888) 719-4210, and Popular
Securities, which can be contacted at (787) 766-6601, and the
co-lead dealer manager is Citi, which can be contacted at (800)
558-3745. The Corporation has filed a registration statement, a
prospectus and related exchange offer materials with the SEC for
the exchange offer to which this communication relates. Before you
decide whether to tender into the Exchange Offer, you should read
the prospectus and other documents the Corporation has filed with
the SEC for more complete information about the Corporation and the
Exchange Offer. You may obtain these documents for free by visiting
EDGAR on the SEC Web site at http://www.sec.gov/. Alternatively,
the Corporation will arrange to send you the prospectus if you
request it by contacting Corporate Communications, at (787)
765-9800. The complete terms and conditions of the Exchange Offer
are set forth in the prospectus and the related letters of
transmittal, copies of which will be available at
http://www.popularinc.com/exchangeoffer and from Global Bondholder
Services Corporation, the information agent, at (866) 540-1500 or,
for bankers and brokers, at (212) 430-3774. This press release is
not an offer to sell or purchase or an offer to exchange or a
solicitation of acceptance of an offer to sell or purchase or offer
to exchange, which may be made only pursuant to the terms of the
prospectus and related letter of transmittal, as applicable.
Forward-Looking Statements: The information included in this press
release may contain certain forward-looking statements. These
statements are based on management's current expectations and
involve certain risks and uncertainties that may cause actual
results to differ materially from those expressed in
forward-looking statements. Factors that might cause such a
difference include, but are not limited to (i) the rate of
declining growth in the economy and employment levels, as well as
general business and economic conditions; (ii) changes in interest
rates, as well as the magnitude of such changes; (iii) the fiscal
and monetary policies of the federal government and its agencies;
(iv) changes in federal bank regulatory and supervisory policies,
including required levels of capital; (v) the relative strength or
weakness of the consumer and commercial credit sectors and of the
real estate markets in Puerto Rico and the other markets in which
borrowers are located; (vi) the performance of the stock and bond
markets; (vii) competition in the financial services industry;
(viii) possible legislative, tax or regulatory changes; and (ix)
difficulties in combining the operations of acquired entities. For
a discussion of such factors and certain risks and uncertainties to
which the Corporation is subject, see the Corporation's Annual
Report on Form 10-K for the year ended December 31, 2008 as well as
its filings with the U.S. Securities and Exchange Commission. Other
than to the extent required by applicable law, including the
requirements of applicable securities laws, the Corporation assumes
no obligation to update any forward-looking statements to reflect
occurrences or unanticipated events or circumstances after the date
of such statements. Popular, Inc. is a full service financial
services provider based in Puerto Rico with operations in Puerto
Rico, the United States, the Caribbean and Latin America. As the
leading financial institution in Puerto Rico, the Corporation
offers retail and commercial banking services through its principal
banking subsidiary, Banco Popular de Puerto Rico, as well as auto
and equipment leasing and financing, mortgage loans, investment
banking, broker-dealer and insurance services through specialized
subsidiaries. In the United States, the Corporation operates Banco
Popular North America ("BPNA"), including its wholly-owned
subsidiary E-LOAN. BPNA is a community bank providing a broad range
of financial services and products to the communities it serves.
BPNA operates branches in New York, California, Illinois, New
Jersey and Florida. E-LOAN markets deposit accounts under its name
for the benefit of BPNA and offers loan customers the option of
being referred to a trusted consumer lending partner. The
Corporation, through its subsidiary EVERTEC, provides transaction
processing services throughout the Caribbean and Latin America, as
well as internally services many of its subsidiaries' system
infrastructures and transactional processing businesses. The
Corporation is exporting its 115 years of experience through these
regions while continuing its commitment to meet the needs of
clients through innovation and to foster growth in the communities
it serves. An electronic version of this press release can be found
at the Corporation's website, http://www.popular.com/. DATASOURCE:
Popular, Inc. CONTACT: Investor Relations, Jorge A. Junquera, Chief
Financial Officer, Senior Executive Vice President,
+1-787-754-1685, or Media Relations, Teruca Rullan, Senior Vice
President, Corporate Communications, +1-787-281-5170, or
+1-917-679-3596 (mobile), both of Popular, Inc. Web Site:
http://www.popular.com/
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