First BanCorp's Backers to Sell $189M Worth of Stock

The three largest shareholders of First BanCorp (FBP) in San Juan, Puerto Rico, are planning to sell approximately $189 million worth of shares.

The Treasury Department and two private-equity stakeholders plan to sell a total of 28 million shares of the $13 billion-asset company at $6.75 a share, First BanCorp announced Wednesday. The company's stock was trading at $6.69 a share Wednesday morning.

The Treasury Department plans to sell 12 million shares of common stock, which would reduce its stake in the troubled lender from approximately 16% to 11%. The company issued the Treasury Department $400 million worth of preferred shares through the Troubled Asset Relief Program in 2009. In 2011, the Treasury and the bank converted this stock, together with approximately $24 million in unpaid dividends, into 33 million shares of common stock, in a move intended to improve the struggling bank's capital structure.

The two private-equity firms, Thomas H. Lee Partners and Oaktree Capital Management, each plan to sell 8 million shares, which would reduce each company's stake in First BanCorp from 24% to 21%.

Credit Suisse Securities, Bank of America Merrill Lynch and Sandler O'Neill are the underwriters for the offering, which is expected to close on Aug. 16.

First BanCorp Chief Executive Aurelio Alemán-Bermúdez is focused on cleaning up the lender's balance sheet by unloading soured loans, he told American Banker in June.

The company reported a second-quarter loss of $122 million.