March 1 Puerto Rico-based lender Popular Inc
said it would a sell $568 million portfolio of
non-performing loans to a joint venture between Caribbean
Property Group and funds affiliated with Perella Weinberg
The portfolio contains non-performing commercial and
construction loans and real estate. Based on the unpaid
principal balance on loans and the appraised value of the real
estate, the portfolio is valued at $1.02 billion.
Popular is selling the portfolio at its current book value
and will book an after-tax loss of about $185 million on the
sale on the first quarter.
The company expects substantial reductions in credit-related
expenses, Chief Executive Richard Carrion said in a statement.
"We have significantly improved our credit risk profile and are
better positioned to manage our capital more effectively.
Popular will receive about $112 million in cash, a note for
about $203 million, and a 24.9 percent interest in the joint
The company will also provide an advance of about $35
million to cover initial costs of some projects.
The bank will also extend a revolving working capital line
of about $30 million to fund certain operating expenses of the
Popular has been selling non-performing loans to clean up
its balance sheet. It last sold a portfolio of bad loans in
Shares of the San Juan-based lender closed at $27.92 on the
New York Stock Exchange on Thursday.