Fitch puts First BanCorp on watch

Fitch Ratings said it placed First BanCorp's B- long-term issuer default rating and D/E individual rating and FirstBank Puerto Rico's B short-term issuer default rating and deposits on Rating Watch negative.

The agency also downgraded FirstBank Puerto Rico's long-term issuer default rating to B- from B, long-term deposit obligations to B+/RR2 from BB-/RR2 and individual rating to D/E from D and placed these on Rating Watch negative.

The companies' 5 support ratings and "No Floor" support floors as well as First BanCorp's C short-term issuer default rating remain unchanged.

On June 4, First BanCorp entered into a consent order with the Federal Deposit Insurance Corp. and the Office of Commissioner of Financial Institutions of Puerto Rico as well as a written agreement with the Federal Reserve Bank of New York. Fitch said the order specifies the need for changes in the company's credit risk and administration area as well as liquidity and capital enhancements, regulators increased the required minimum ratios in order to be considered "well-capitalized" to be implemented sometime in the future, and First BanCorp must submit a capital plan to address its new capital targets.

The negative Watch incorporates Fitch's view that First BanCorp will likely require external capital support in the near term given the high level of credit costs that continue to erode its existing weak level of tangible common equity.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.