Popular Inc. announced Friday that it had exchanged $934.1 million of its preferred shares as part of its plan to boost common equity capital and set aside funds in case of worse-than-expected conditions.
Separately, the company announced that the Treasury Department would convert $935 million of Popular preferred stock it received through the Troubled Asset Relief Program into trust-preferred securities, a move that signaled the government's interest in maintaining a strong lender in the troubled Puerto Rican economy.
Popular of San Juan, the parent company of Banco Popular, has been struggling with the island's four-year recession and with the aftermath of its expansion into the mainland's banking and subprime-loan markets. Banco Popular is Puerto Rico's biggest bank by assets and deposits.
The company had to extend the deadline on the offering twice and had sweetened the deal to try to get shareholders to participate. The Treasury also got involved to nudge more trust-preferred holders to participate.
Richard Carrion, Popular's chairman and chief executive, said Friday that the exchange offer was necessary given the current state of the economy in the United States and Puerto Rico. "The corporation is now well positioned in the event a worse-than-expected business environment materializes," he added.
Popular said it will issue about 357.6 million common shares in the exchange offer, which will more than double the number of common shares outstanding.