Popular eyes issuance of $400 million debt to fund TARP repayment

By Marisa Wong

Madison, Wis., June 19 – Popular, Inc. plans to issue $400 million of debt securities, subject to market conditions, to help fund its repayment of Troubled Asset Relief Program Capital Purchase Program funds, according to an 8-K filing with the Securities and Exchange Commission.

The company intends to repay $935 million of TARP funds with a combination of internal liquidity and proceeds from the debt issuance.

The company said it does not plan to issue any equity in connection with the redemption.

Popular will redeem its junior subordinated debentures held by Popular Capital Trust III, which will in turn redeem the $935 million of trust capital securities held by the Department of the Treasury.

The trust capital securities were issued to the Treasury in August 2009 in exchange for 935,000 shares of Popular’s series C preferred stock initially issued in December 2008 under the TARP Capital Purchase Program.

Popular is a financial services provider based in San Juan, Puerto Rico.

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