UPDATE 1-First BanCorp to offer shares worth $500 mln

Thu Sep 16, 2010 8:11am EDT

* Share issue part of earlier capital-raise plan

* Sandler O'Neill, UBS to underwrite offering

Sept 16 (Reuters) - Loss-making First BanCorp (FBP.N) will sell $500 million worth shares as the Puerto Rican financial holding company looks to raise capital levels at its banking unit.

The offering is part of an earlier capital-raise plan in response to regulatory concerns about capital levels and non-performing assets at the banking unit.

The bank has been battered by a decline in value of residential and commercial real estate in Florida and Puerto Rico in the wake of the financial crisis. Analyst see the company as a takeover target for Bank of Nova Scotia (BNS.TO).

Sandler O'Neill and UBS Investment will underwrite the offering, the company said in a regulatory filing.

First BanCorp shares have fallen 77 percent since June 4, when the company unveiled its capital plans. The stock closed at 34 cents Wednesday on the New York Stock Exchange. (Reporting by Sweta Singh in Bangalore; Editing by Vinu Pilakkott)