Puerto Rico's Popular Inc to Sell $568 Million Non-Performing Loans Portfolio

By Edward B. Doong

Mar 01, 2013 03:11 PM EST

Puerto Rican lender Popular Inc. announced that it has plan of selling portfolio of non-performing loans worth $568 million to a joint venture between Caribbean Property Group and Perella Weinberg Partners-affiliated funds.

Popular has been aiming to sell the portfolio, containing non-performing commercial and construction loans and real estate, at its current book value and plans to book an after-tax loss of about $185 million on the sale on the first quarter.

Company chief executive Richard Carrion said in a statement that the lender is expecting substantial reductions in expenses related to credit, highlighting improvement signs on the firm's credit risk profile.

Expected to offer about $35 million in advance to cover initial costs of some projects, Popular will be receive about $112 million in cash and 24.9% interest in the joint venture.

On the New York Stock Exchange, Popular, which is based in San Juan, saw its shares closing at $27.92.

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