Popular greenshoe fully exercised, lifts convertibles to $1.15 billion

By Devika Patel

Knoxville, Tenn., April 19 - Underwriters for Popular Inc.'s offering of convertible common equivalent securities exercised their over-allotment option in full for $150 million more of the securities, increasing the size of the issue to $1.15 billion, the company said in an 8-K filed Monday with the Securities and Exchange Commission.

As previously reported, the company sold the securities in a registered off-the-shelf offering on April 13 via bookrunner Morgan Stanley.

Each common equivalent security consists of a $25 depositary share representing a one-fortieth interest in a share of contingent convertible perpetual non-cumulative preferred stock, series D.

The preferred stock represented by the depositary shares will automatically convert into shares of Popular common stock at a conversion rate of 8.3333 shares of common stock for each depositary share on the fifth business day after Popular common shareholders approve an amendment to increase the number of authorized shares.

Popular is required to hold a shareholder vote by Sept. 15.

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 Federal Deposit Insurance Corp.-assisted transactions.

Pietrantoni Mendez & Alvarez LLP and Sullivan & Cromwell LLP were the company's legal advisers.

San Juan, Puerto Rico-based Popular is a financial services company.

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