Popular plans to price about $900 million of convertible common equivalent securities

By Rebecca Melvin

New York, April 12 - Popular Inc. launched an offering of about $900 million of convertible common equivalent securities on Monday that was seen pricing after the close of markets on Tuesday, according to a syndicate source.

The deal is being made under Popular's existing shelf registration statement and will be sold via Morgan Stanley as bookrunner, with Popular Securities, Keefe Bruyette & Woods and UBS Investment Bank acting as co-managers.

The security is similar to other bank offerings made recently, including Bank of America Corp.'s issue in December 2009 of common equivalent securities that automatically convert into shares upon a shareholder vote. Popular is required to hold a shareholder vote by Sept. 15, 2010.

If shareholder approval is not obtained, then the dividend will be an as-converted dividend with a 13% step up, plus an additional 1% step up every six months for a 16% maximum.

Popular intends to use proceeds of the offering for general corporate purposes, including investments in, or extensions of credit to, its subsidiaries to increase their capital, including positioning Popular to participate in FDIC-assisted transactions.

The financial services company is based in San Juan, Puerto Rico.

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