First BanCorp expects to sell approximately $400 million of its preferred stock and a warrant to purchase up to $60 million

First BanCorp, the parent corporation of FirstBank Puerto Rico, has received preliminary approval from the US Department of the Treasury to participate in its capital purchase programme.


As a result, or approximately 5.8 million shares of common stock of the corporation, in accordance with the terms of the capital purchase programme (CPP) term sheet.


First BanCorp said that this additional capital will increase the total regulatory capital ratio to approximately 15%, or $775 million in excess of the well-capitalised requirement and the tier one capital ratio to approximately 14% or approximately $1.2 billion in excess of the well-capitalised requirement.


The corporation’s participation in the CPP is subject to standard terms and conditions. The preferred stock will qualify as tier one regulatory capital and will carry a 5% coupon for the first five years and a 9% coupon thereafter. The warrant will have a 10-year term, will be immediately exercisable upon issuance and will be transferable. Issuance of the preferred stock and warrant is subject to satisfaction of closing conditions and due diligence procedures which are expected to be completed within the next 30 days.


Luis Beauchamp, chairman and CEO of First BanCorp, said: Upon final approval and funding of this additional capital, First BanCorp will have further strengthened its capital position and liquidity. This capital will be deployed in the markets in which we operate, these being Puerto Rico, Florida and the US Virgin Islands and will have the effect of assisting the economic recovery of these markets.