* THL to buy $180 mln of shares at $3.50 a share
* Investment at a 32 pct discount to stock's closing price
* THL will eventually own a 25 pct stake in the bank
* First Bancorp to also conduct $35 mln rights issue
* First BanCorp shares down 7 percent
(Adds details on rights offering, PE firms getting stakes in
BANGALORE, May 31 Puerto Rico-based First
BanCorp said private equity firm Thomas H Lee Partners
agreed to invest $180 million and would eventually own a quarter
of the company, making it the latest in a series of troubled
banks to receive private equity infusions.
Capital-starved lenders such as United Community Banks
, Pacific Capital Bancorp , Sterling Financial
, BankUnited and others have been bailed out by
private equity when traditional sources of funding dried up.
Though U.S. bank regulators have crafted tough rules
governing private equity firms buying failed banks, firms like
Corsair Capital, Oak Hill Capital Partners, Warburg Pincus,
Thomas H Lee, Carlyle can sidestep those rules by taking stakes
in the banks before they fail. [ID:nSGE64D0K5]
Thomas H Lee will buy shares of First BanCorp, the holding
company for FirstBank, for $3.50 per share, a 32 percent
discount to their closing price on Friday.
The private equity firm will own a quarter of the bank,
after taking into account the conversion of the U.S. Treasury's
$425 million preferred shares into common stock.
The lender said the transaction is contingent on it selling
a minimum of $500 million, but no more than $550 million of
common stock, including Thomas H Lee's $180 million investment.
In June last year, First BanCorp said it would raise $500
million in equity after banking regulators asked it to boost its
capital ratios. [ID:nSGE6530GG]
In January, First Bancorp implemented a one-for-15 reverse
stock split to boost its share price, which were trading at
under a dollar, and made it more attractive to investors looking
to invest in the company. [ID:nSGE7040C0]
The bank will also begin a $35 million rights offering,
giving existing shareholders the rights to purchase common stock
at $3.50 per share.
The $35 million raised through the rights offering would
count towards the $500-$550 million capital raise.
First BanCorp has been battered by a decline in value of
residential and commercial real estate properties in Florida and
Puerto Rico in the wake of the financial crisis.
The deal gives Thomas H Lee the right to a seat on First
Shares of First BanCorp were down 7 percent at $4.78 in
early trade on Tuesday on the New York Stock Exchange.
(Reporting by Jochelle Mendonca in Bangalore; Editing by Maju