SAN JUAN, Puerto Rico (TheStreet) -- First BanCorp (FBP) on Tuesday announced a deal to sell $180 million in common shares to private equity firm Thomas H. Lee Partners, "as part of a proposed aggregate $500 to $550 million capital raise," according to the bank.
Under the agreement, Thomas H. Lee Partners will purchase $180 million in newly issued common shares. at a price of $3.50 a share. That is a 32% discount to First Bancorp's closing price on Friday, of $5.12.
First BanCorp also said it "expects to issue to those shareholders who are holders of its common stock prior to the completion of the capital raise, rights that would entitle them to purchase common stock of the Corporation at $3.50 per share in a rights offering of up to $35 million in common equity."
The deal with Thomas H. Lee calls for First BanCorp to raise a total of between $500 million and $550 million in common equity, which will include a public offering, as well as shareholder approval of all common stock sales.Regulatory approval will also be needed for the common stock sales and for Fist BanCorp's plan to convert "approximately $425 million of Series G Mandatorily Convertible Preferred Stock," held by the Treasury for bailout assistance through the Troubled Assets Relief Program, or TARP, into common shares. First BanCorp said that after the completion of its capital raise and the preferred conversion and TARP exit, the Thomas H. Lee Partners investment "would represent approximately 24.9% ownership of the Corporation." Thomas H. Lee Partners will also gain the right to designate an appointment to First BanCorp's board of directors. First BanCorp's competitor Popular, Inc. (BPOP) also completed a conversion of TARP preferred shares. The company still owes $935 million in TARP money, having converted the preferred shares held by the Treasury to trust-preferred shares in the third quarter of 2009.
Philip van Doorn. To follow the writer on Twitter, go to http://twitter.com/PhilipvanDoorn. To submit a news tip, send an email to: firstname.lastname@example.org.
Select the service that is right for you!COMPARE ALL SERVICES
Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.
- $2.5+ million portfolio
- Large-cap and dividend focus
- Intraday trade alerts from Cramer
- Weekly roundups
Access the tool that DOMINATES the Russell 2000 and the S&P 500.
- Buy, hold, or sell recommendations for over 4,300 stocks
- Unlimited research reports on your favorite stocks
- A custom stock screener
- Upgrade/downgrade alerts
Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.
- Diversified model portfolio of dividend stocks
- Alerts when market news affect the portfolio
- Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.
- Real Money + Doug Kass + 15 more Wall Street Pros
- Intraday commentary & news
- Ultra-actionable trading ideas
Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.
- 100+ monthly options trading ideas
- Actionable options commentary & news
- Real-time trading community
- Options TV