First BanCorp again extends expiration of preferreds exchange offer

By Toni Weeks

San Luis Obispo, Calif., March 26 - First BanCorp again extended the expiration date for its offering of up to 10,087,488 newly issued shares of its common stock in exchange for $63,046,800 liquidation preference of noncumulative perpetual monthly income preferred stock. The new expiration date is now midnight ET on April 9, according to a company press release. The previous expiration date of March 25 had already been extended from March 18.

Due to the extension of the expiration date, the relevant price and exchange ratios for the exchange offer were recalculated.

The company has now fixed the exchange ratio at 3.57 shares of common stock for each share of each series of preferred stock validly tendered and not withdrawn. The new exchange ratio is based on an increased exchange value of $22 per share of preferred stock divided by the relevant price of $6.1593, which was the average volume-weighted average price of a share of common stock during the five trading-day period that ended March 21. The original exchange value was $20, and the original exchange ratio was 3.24 shares of common stock per share of preferred stock, according to a previous press release.

As previously reported, the offer is being made to the holders of the company's $11,254,875 liquidation preference of 7 1/8% series A preferreds, $11,899,675 liquidation preference of 8.35% series B preferreds, $11,515,275 liquidation preference of 7.4% series C preferreds, $12,764,800 liquidation preference of 7¼% series D preferreds and $15,612,175 liquidation preference of 7% series E preferreds.

As of midnight ET on March 25, 61,076 shares of series A preferred stock, 31,187 shares of series B preferred stock, 33,516 shares of series C preferred stock, 35,886 shares of series D preferred stock and 109,137 shares of series E preferred stock had been validly tendered and not withdrawn.

The company previously reported in a March 19 press release that as of the original March 18 expiration date, 68,076 shares of series A preferred stock, 30,887 shares of series B preferred stock, 45,275 shares of series C preferred stock, 42,543 shares of series D preferred stock and 116,947 shares of series E preferred stock had been validly tendered and not withdrawn.

As noted before, the company will issue a number of shares of common stock in exchange for each preferred accepted based on an exchange value of $20 per preferred divided by the higher of (1) the average volume-weighted average price of the common stock during the five trading days ending on the second business day immediately preceding the expiration date and (2) $5 per common share. No more than four common shares will be issued in exchange for each preferred.

More details

As noted before, to participate in the exchange offer, holders must grant a proxy permitting the proxyholders to execute a written consent in favor of an amendment that would delete the section of the preferreds' certificate of designation that allows the holders to appoint two additional members to the board of directors when the company has not paid dividends in full on the preferreds for 18 monthly dividend periods (whether consecutive or not).

The holders currently have this right given that the company has not paid dividends since August 2009.

Holders of preferreds that are not tendered in the exchange offer will receive a fee of $0.25 per preferred for their proxies in favor of the amendment if the amendment is approved. No such fee will be paid for tendered preferreds, according to a schedule 14A filing with the Securities and Exchange Commission.

The exchange offer is conditioned on the holders of at least two-thirds of each series of preferreds and the holders of at least a majority of the common stock giving their consent to the preferred stock amendment.

The dealer manager is Sandler O'Neill + Partners, LP (866 805-4128 or 212 466-7807). Computershare is acting as exchange agent, and Georgeson Inc. (866 856-6388 or 212 440-9800) is acting as information agent.

First BanCorp is based in San Juan, Puerto Rico. It is the parent corporation of FirstBank Puerto Rico, a state-chartered commercial bank.

© 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.