Puerto Rico S&L To Swap Issues

NEW YORK - First Federal Savings Bank of Puerto Rico said it got Federal Deposit Insurance Corp. approval to exchange new noncumulative preferred stock for $34.3 million of cumulative preferred stock now held by the FDIC.

The new issue will bolster First Federal's core capital ratio. Cumulative preferred stock does not qualify as core capital.

First Federal, whose $1.9 billion in assets makes it the largest thrift on the island, said that before the exchange it will set aside funds in an investment trust to redeem its FDIC-guaranteed subordinated notes, a substantial portion of which mature in December 1991 and January 1992.

The company said accumulated and unpaid dividends on the preferred stock held by the FDIC as of the date of exchange would be paid to the FDIC in warrants to buy about 640,000 common shares. The transaction is subject to shareholder approval at a special meeting in July.

The tangible, core, and risk-based capital ratios, which were 1.53%, 1.59%, and 4.84% of assets at March 31, will increase on a pro forma basis to 3.34%, 3.40%, and 6.75%. The first two exceed regulatory minimums; the last would still be below the 7.2% requirement.

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