First BanCorp said Wednesday that it plans to sell nearly $702 million in loans to a new joint venture in order to reduce its high-risk exposure to Puerto Rico's crippled economy.

The San Juan company signed a letter of intent on Tuesday to sell the portfolio for $401.9 million to an unnamed entity "majority owned by a global financial services firm."

First BanCorp will update the collections from the outstanding balance before the deal closes. First BanCorp expects a $112.1 million pretax loss from the sale.

The portfolio has a net book value of $602.8 million and is about 95% adversely classified. The sale would reduce classified assets and nonperforming loans by $876.3 million, the company said.

The $16.7 billion-asset company had already reduced assets by 12%, or $2.2 billion, in the past six months. Still, nonperforming assets were 10.6% of total assets at Sept. 30.

The previous asset reduction resulted in the company having to raise less capital under a restructured deal announced last week with the Treasury Department. First BanCorp is looking to raise $350 million instead of the $500 million it was originally set to raise. The pending loan sale is expected to impact capital ratios.

"Considering the net book value and the specific additional reserves of the loans being sold, the transaction will have a modest impact on capital ratios," the company said in its latest announcement.

FirstBank Puerto Rico had a total risk-based capital ratio of 12.81% at Sept. 30 and is under a consent order with regulators.

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