Fitch Downgrades Popular, Inc. & Subsidiaries; Remain on Watch Negative

NEW YORK--(Business Wire)--
Fitch Ratings has downgraded the Long-term Issuer Default Rating (IDR) of
Popular, Inc. (Popular) to 'B' from 'BBB' and downgraded the Long-term IDRs of
units Banco Popular de Puerto Rico and Banco Popular North America to 'BB-' from
'BBB'. All ratings remain on Rating Watch Negative, where they were first placed
on May 15, 2009. A complete listing of ratings follows this release.

Today's action follows Popular's announcement that it is offering an exchange of
its preferred stock instruments into common stock to boost its existing weak
level of tangible common equity, which stood at just 2.7% of tangible assets on
March 31, 2009. The magnitude of this plan underscores the asset quality
challenges currently being faced by Popular. The level of non-performing loans
remains well above average among major and regional U.S. banks with the prospect
of further deterioration.

Popular's ratings remain on Watch Negative given the execution risk associated
with the new exchange plan and the prospect of escalating asset quality issues.
The removal from Watch Negative hinges on the success of this plan as well as a
stabilization of problem loans.

Particularly in a stress scenario, there is the risk that considerable funds
from the holding company could be downstreamed to boost bank level capital
ratios. This potential outcome could hamper the ability of the holding company
(Popular) and sub-holding company (Popular North America, Inc.) to service a
considerable level of holding company debt. Consequently, Fitch has widened the
notching between holding company and bank level IDRs. The holding company senior
debt rating has been assigned a recovery rating of 'RR4'.

Investors in preferred stock are being encouraged to participate through the
suspension of preferred dividends. Given this suspension, the preferred stock
rating of Popular was downgraded to 'C/RR6' from 'BB+'. (Please see commentary
'Fitch Sees Elevated Risk of Bank Hybrid Capital Coupon Deferral in 2009' dated
Feb. 4, 2009 available on Fitch's web site at www.fitchratings.com). While the
current plan suggests trust preferred holders will not face an immediate
suspension of payments, Fitch believes the potential for future deferral is
increasing. Consequently, the trust preferred rating has been downgraded to
'CCC/RR6' from 'BB+'.

Fitch has downgraded the following ratings, which remain on Watch Negative:

Popular, Inc. (Popular)

--Long-term IDR to 'B' from 'BBB';

--Short-term IDR to 'B' from 'F2';

--Senior unsecured to 'B/RR4' from 'BBB';

--Short-term Debt to 'B' from 'F2';

--Individual to 'D/E' from 'C'.

Popular North America, Inc.

--Long-term IDR to 'B' from 'BBB';

--Senior unsecured to 'B/RR4' from 'BBB';

--Short-term IDR to 'B' from 'F2';

--Short-term Debt to 'B' from 'F2';

--Individual rating to 'D/E' from 'C'.

Banco Popular North America

--Long-term IDR to 'BB-' from 'BBB';

--Long-term deposits to 'BB' from 'BBB+';

--Short-term IDR to 'B' from 'F2';

--Short-term deposits to 'B' from 'F2';

--Individual rating to 'D' from 'C'.

Banco Popular de Puerto Rico

--Long-term IDR to 'BB-' from 'BBB';

--Long-term deposits to 'BB' from 'BBB+';

--Short-term IDR to 'B' from 'F2';

--Short-term deposits to 'B' from 'F2';

--Individual rating to 'D' from 'C'.

BanPonce Trust I

--Trust preferred to 'CCC/RR6' from 'BB+'.

Popular Capital Trust I

--Trust preferred to 'CCC/RR6' from 'BB+'.

Popular Capital Trust II

--Trust preferred to 'CCC/RR6' from 'BB+'.

Popular North America Capital Trust I

--Trust preferred to 'CCC/RR6' from 'BB+'.

Fitch has downgraded the following ratings and removed them from Watch Negative:

Popular

--Preferred stock to 'C' from 'BB+'.

Fitch has affirmed the following ratings:

Popular

--Support at '5';

--Support floor at 'NF'.

Popular North America, Inc.

--Support at '5';

--Support floor at 'NF'.

Banco Popular North America

--Support at '5';

--Support floor at 'NF'.

Banco Popular de Puerto Rico

--Support at '4';

--Support Floor at 'B'.

Fitch's rating definitions and the terms of use of such ratings are available on
the agency's public site, www.fitchratings.com. Published ratings, criteria and
methodologies are available from this site, at all times. Fitch's code of
conduct, confidentiality, conflicts of interest, affiliate firewall, compliance
and other relevant policies and procedures are also available from the 'Code of
Conduct' section of this site.

Fitch Ratings, New York
Joe Scott, +1-212-908-0624
Vincent Arscott, CFA, +1-212-908-0872
Brian Bertsch, +1-212-908-0549 (Media Relations)
brian.bertsch@fitchratings.com

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