R&G Financial files bankruptcy amid bank subsidiary receivership

By Caroline Salls

Pittsburgh, May 17 - R&G Financial Corp. filed for Chapter 11 bankruptcy on Friday in the U.S. Bankruptcy Court for the District of Puerto Rico.

According to an 8-K filed with the Securities and Exchange Commission, the April 30 appointment of the Federal Deposit Insurance Corp. as receiver of wholly owned banking subsidiary R-G Premier Bank of Puerto Rico triggered an event of default on its junior subordinated debentures.

R&G Capital Trust III, R&G Capital Trust V and R&G Capital Trust VI are the holders of the debentures, which in turn issued trust preferred securities to investors.

The debentures were subsequently accelerated, but that acceleration is subject to the automatic stay imposed by the company's bankruptcy filing.

R&G said it had a total of $335 million of its 6.95% junior subordinated debentures, 6.52% junior subordinated debentures and 6.62% junior subordinated deferrable interest debentures outstanding at April 30.

According to court documents, R&G Financial had $40.21 million of assets and $420.69 million of debt at April 30.

R&G is a San Juan, Puerto Rico-based bank holding company. The Chapter 11 case number is 10-04124.

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