First BanCorp in San Juan, Puerto Rico, on Tuesday said it struck an agreement under which the private equity firm Thomas H. Lee Partners LP may buy $180 million of its common stock as part of a capital improvement plan.

THL's stock purchase is predicated on First BanCorp selling a total of $500 to $550 million in common stock. The private equity firm would pay $3.50 per share.

First BanCorp also plan to allow existing common shareholders to purchase additional common stock at the same price in a rights offering limited at $35 million of common equity.

Aurelio Aleman, the president and chief executive of First BanCorp, said the deal with THL is a "critical and important step" as it will "strengthen the corporation's balance sheet and capital ratios."

Earlier this month First BanCorp reported a Tier 1 leverage ratio of 7.6% and a total risk-based capital ratio of 11.97% as March 31. Under the May 2010 enforcement action, the bank must raise those ratios to 8% and 12%, respectively.

Following the capital raise and First BanCorp's conversion of about $425 million of preferred stock held by the U.S. Treasury Department into common stock, THL would have about a 24.9% stake in the company.

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