First BanCorp in San Juan, Puerto Rico, has put another big problem behind it.
The $11.9 billion-asset company said in press release Monday that it sold its outstanding participation in a line of credit to the Puerto Rico Electric Power Authority to an unnamed buyer, resulting in a loss of roughly $570,000.
This sale reduced the company’s nonperforming assets by about 9%. Nonperforming assets totaled $735 million at Dec. 31.
The transaction should also lower First BanCorp’s total direct exposure to the Puerto Rican government by 20%, to about $258 million, Joe Gladue, an analyst at Merion Capital, wrote in a note to clients.
“The sale removes an item that presented risks of greater losses and occupied management time and investor attention,” Gladue wrote.