First BanCorp, parent company of FirstBank Puerto Rico and FirstBank VI, has entered into agreements with two investment funds to sell 49.8 percent of its common stock, allowing it to end the U.S. Treasury’s part ownership, which began in 2009 after First BanCorp received federal bailout funds during the height of the worldwide financial crisis.
The most recent agreement, announced by the company Monday, has Oaktree Capital Management purchasing about $175.5 million of common stock of the Corporation at $3.50 per share. Once complete, the Oaktree investment will represent 24.9 percent of First BanCorp’s outstanding shares of common stock.
The Oaktree agreement mirrors a May agreement with Thomas H. Lee Partners to purchase about $180 million in common stock, also acquiring 24.9 percent of FirstBancorp’s outstanding shares.
The two agreements, together with another $164 million in stock purchases from other institutional investors, totals $515 million in capital commitments.
As the Source reported in 2009, FirstBancorp sold the U.S. Treasury over $400 million in preferred shares as part of that year’s federal bank bailout (See FirstBank Holding Its Own Through Hard Times).
The new capital will allow the sale of the federal government’s shares in the company in the form of $424.2 million of Series G Mandatorily Convertible Preferred Stock held by the U.S. Treasury Department, said Aurelio Alemán, First BanCorp president and chief executive officer, in a statement.
The bank will now go ahead with the actions needed to complete the transaction, including seeking stockholder approval for the sale of shares, said Alemán
First BanCorp is the parent corporation of FirstBank Puerto Rico, a state-chartered commercial bank with operations in Puerto Rico, the Virgin Islands and Florida; of FirstBank Insurance Agency; and of Ponce General Corporation.
The corporation operates a total of 153 financial services facilities throughout Puerto Rico, the U.S. and British Virgin Islands, and Florida. Among the subsidiaries of FirstBank Puerto Rico are Money Express, a finance company; First Leasing and Car Rental, a car and truck rental leasing company; and FirstMortgage, a mortgage origination company.
In the U.S. Virgin Islands, FirstBank operates First Express, a small loan company.
