Popular (BPOP) Receives Preliminary Approval to Participate in TARP

November 18, 2008 9:35 AM EST

Popular, Inc. (Nasdaq: BPOP) today announced that it has received preliminary approval from the U.S. Department of the Treasury to participate in its Capital Purchase Program under the TARP. As a result, the Corporation expects that Treasury will purchase $950 million newly issued shares of the Corporation's preferred equity stock.

The Corporation's participation in the CPP is subject to standard terms and conditions. As a result, the preferred stock will carry a 5% coupon for five years, and a 9% coupon thereafter. In addition, the Treasury will receive warrants to purchase up to $142.5 million of common shares of the Corporation, in accordance with the terms of the TARP's CPP Term Sheet. These warrants will expire 10 years from issuance. Issuance of the preferred stock and warrants is subject to satisfaction of closing conditions.

The amount of preferred stock to be purchased by the Treasury represents approximately 3% of the Corporation's consolidated risk weighted assets as of June 30, 2008, which amounted to $32.1 billion.

Popular, Inc., through its subsidiaries, offers a range of retail and commercial banking products and services in Puerto Rico and the United States.

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