BankingFinancial District

First Bancorp sells off another block of stock

First Bancorp announced Tuesday it has entered into a definitive agreement with Oaktree Capital management to sell 24.9 percent of its common stock, for $175.5 million. The transaction comes a month after FirstBank’s parent company entered into a similar agreement with private equity firm Thomas H. Lee Partners, L.P.

Through that transaction, First Bancorp sold the same participation, to raise about $180 million of the bank’s common stock.

Both transactions require First Bancorp to convert into common stock its Series G preferred stock currently owned by the U.S. Department of Treasury and raising a total of at least $500 million but no more than $550 million of new capital.

The Oaktree investment will be made on substantially the same terms as the previously announced investment agreement with Thomas H. Lee Partners, L.P. (“THL”). In addition, like the THL transaction, the Oaktree agreement gives Oaktree the right to designate a person to serve on the Corporation’s Board of Directors upon completion of the sale of shares of common stock to Oaktree.

First Bancorp also has entered into investment agreements with institutional investors and other private equity firms for the issuance of an aggregate of approximately $164 million of the Corporation’s common stock, which, together with the THL and Oaktree investments, totals $515 million in commitments.

“With the aggregate amount of these commitments we now exceed the minimum $500 million required for completion of the capital raise. The total amount of the capital raise will enable us to compel the conversion of the Series G Preferred Stock, substantially strengthen our capital ratios and reinforces First BanCorp’s position as the second largest banking franchise in Puerto Rico,” said First BanCorp President Aurelio Alemán. “The corporation will now proceed with the actions necessary for completion of the transaction, including seeking stockholder approval for the aggregate sale of shares under these investment agreements.”

Author Details
Business reporter with 25 years of experience writing for weekly and daily newspapers, as well as trade publications in Puerto Rico. My list of former employers includes Caribbean Business, The San Juan Star, and the Puerto Rico Daily Sun, among others. My areas of expertise include telecommunications, technology, retail, agriculture, tourism, banking and most other areas of the economy.

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