First BanCorp in Puerto Rico Scraps Planned Exchange Offer

First BanCorp (FBP) in San Juan, Puerto Rico, has scrapped a plan to swap common stock for a certain type of preferred stock.

First BanCorp said Wednesday that it failed to receive investor approval for the offer, which the $13 billion-asset company had hoped would improve its capital position by redeeming roughly $63 million of noncumulative perpetual preferred stock. The offer required the approval of two-thirds of each of five classes of preferred stock.

Last month, First Bancorp sweetened the exchange value by 10%, to $22 a share, and extended the offer until Tuesday.

A spokesman for First BanCorp did not respond immediately to a request for comment.

The company is under a June 2010 order from the Federal Reserve Board that requires it to take steps to strengthen its balance sheet, which was burdened by nonperforming loans when the financial crisis hit. The company recently said it would raise $201 million through three separate sales of commercial loans.