As filed with the Securities and Exchange Commission on July 8, 1999
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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POPULAR, INC.
(Exact name of Registrant as specified in its charter)
PUERTO RICO 66-0416582
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
209 MUNOZ RIVERA AVENUE (787) 765-9800
HATO REY, PUERTO RICO 00918 (Registrant's telephone
(Address of principal executive offices) number, including area code)
POPULAR INTERNATIONAL BANK, INC.
(Exact name of Registrant as specified in its charter)
PUERTO RICO 66-0489108
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
209 MUNOZ RIVERA AVENUE (787) 765-9800
HATO REY, PUERTO RICO 00918 (Registrant's telephone
(Address of principal executive offices) number, including area code)
POPULAR NORTH AMERICA, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 66-0476353
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
521 FELLOWSHIP ROAD (787) 765-9800
MT. LAUREL, NEW JERSEY 08054 (Registrant's telephone
(Address of principal executive office) number, including area code)
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JORGE A. JUNQUERA
209 MUNOZ RIVERA AVENUE
HATO REY, PUERTO RICO 00918
(787) 765-9800
(Name, address, and telephone number, including area code, of agent for service)
COPIES TO:
Donald J. Toumey, Esq. Norman Slonaker, Esq.
Sullivan & Cromwell Brown & Wood LLP
125 Broad Street One World Trade Center
New York, New York 10004 New York, New York 10004
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement as
determined by the Registrants on the basis of market conditions and other
factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, please check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT TO BE OFFERING PRICE PER AGGREGATE OF OFFERIN AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE REGISTERED REGISTERED UNIT(1) PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Debt Securities and Preferred Stock................ $1,500,000,000 100% $1,500,000,000 $417,000
Guarantees......................................... (2) (2) (2) (2)
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
(2) No additional consideration will be received for the Guarantees.
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The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until this Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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<PAGE>
RED HERRING TEXT
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The information in this prospectus is not complete and may be changed. We may
not sell these securities until the registration statement filed with the
Securities and Exchange Commission is effective. This prospectus is not an offer
to sell these securities and it is not soliciting an offer to buy these
securities in any state where the offer or sale is not permitted.
<PAGE>
Subject to Completion.
Preliminary Prospectus dated July 8, 1999
PROSPECTUS
POPULAR, INC.
OR
POPULAR INTERNATIONAL BANK, INC.
OR
POPULAR NORTH AMERICA, INC.
DEBT SECURITIES AND PREFERRED STOCK
<TABLE>
<S> <C>
o By this prospectus, we may offer from time to time o When we offer debt securities or preferred stock,
up to $1,500,000,000 of our: we will provide you with a prospectus
supplement or a term sheet describing the terms
o debt securities and of the specific issue of debt securities or preferred
stock, including the offering price.
o preferred stock
o You should read this prospectus and the
o Popular will unconditionally and absolutely prospectus supplement or the term sheet relating
guarantee all debt securities and preferred stock to the specific issue of debt securities or preferred
offered by Popular International Bank or Popular stock carefully before you invest.
North America.
</TABLE>
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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We may sell the debt securities or preferred stock directly or through one
or more agents or dealers. The agents are not required to sell any specific
number or amount of the debt securities or preferred stock.
When we define a specialized term, it appears in BOLD, ITALICIZED type. We
refer to the debt securities and preferred stock issued under the terms of this
prospectus as the SECURITIES and to Popular's guarantee of securities offered by
Popular International Bank or Popular North America as the GUARANTEES.
The date of this prospectus is , 1999
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POPULAR, INC.
Popular is a diversified bank holding company (formerly BanPonce
Corporation). As a bank holding company, Popular is registered under the Bank
Holding Company Act of 1956 and is subject to the supervision and regulation of
the Board of Governors of the Federal Reserve System. Popular was incorporated
in 1984 under the laws of the Commonwealth of Puerto Rico and has developed into
the largest financial institution in Puerto Rico. On December 31, 1998, Popular
ranked as the 37th largest bank holding company in the United States in terms of
total assets. At June 30, 1999, Popular's consolidated assets totaled $23.7
billion, its aggregate deposits were $13.9 billion, and its stockholders' equity
amounted to $1.7 billion.
In 1998, Popular commenced a program to reorganize and streamline its
operations in the mainland United States. The reorganization allows Popular to
take advantage of recent changes in U.S. federal banking laws involving branch
banking across state lines. The reorganization was largely completed on
January 1, 1999.
Popular's principal subsidiary, Banco Popular de Puerto Rico, which we
refer to as BANCO POPULAR, was incorporated over 100 years ago in 1893 and is
Puerto Rico's largest bank. At June 30, 1999, Banco Popular had consolidated
total assets of $17.1 billion, deposits of $10.3 billion and stockholders'
equity of $1.1 billion. Banco Popular accounted for 72% of the total
consolidated assets of Popular at June 30, 1999. A consumer-oriented bank, Banco
Popular has the largest retail franchise in Puerto Rico, operating 200 branches
and 426 automated teller machines. Banco Popular also has the largest trust
operation in Puerto Rico.
Banco Popular also operates eleven branches in the U.S. Virgin Islands and
one branch in the British Virgin Islands.
Banco Popular's deposits are insured under the Bank Insurance Fund of the
Federal Deposit Insurance Corporation.
In addition to its branch banking network, Banco Popular offers more
specialized services through three subsidiaries:
o Popular Leasing & Rental, Inc., Puerto Rico's largest vehicle leasing and
daily rental company
o Popular Finance, Inc., a small-loan and secondary mortgage company with 50
offices in Puerto Rico
o Popular Mortgage, Inc., a mortgage bank with eleven offices in Puerto Rico.
Popular has two other principal subsidiaries:
o Popular Securities Incorporated, a securities broker-dealer in Puerto Rico
with brokerage, financial advisory and investment operations for
institutional and retail customers
o Popular International Bank, Inc.
Popular International Bank owns all of the outstanding stock of Popular
North
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America and ATH Costa Rica, which provides ATM switching and driving
services in San Jose, Costa Rica. In addition, Popular International Bank has an
investment in 57% of the outstanding stock of Banco Fiduciario S.A., a
commercial bank in the Dominican Republic with total assets of $441.3 million as
of June 30, 1999.
More information regarding Popular North America and Popular International
Bank is provided below under "Popular International Bank, Inc." and "Popular
North America, Inc."
Popular's principal executive offices are located at 209 Munoz Rivera
Avenue, Hato Rey, Puerto Rico 00918, and its telephone number is (787) 765-9800.
POPULAR INTERNATIONAL BANK, INC.
Popular International Bank, a wholly owned subsidiary of Popular, was
organized in 1992 under the laws of the Commonwealth of Puerto Rico. Popular
International Bank operates as an international banking entity under the
International Banking Center Regulatory Act of Puerto Rico and is a registered
bank holding company under the Bank Holding Company Act. Popular International
Bank owns all of the outstanding capital stock of Popular North America. Popular
International Bank is principally engaged in providing managerial services to
its subsidiaries. Summary consolidated financial statements of Popular
International Bank are included in the notes to Popular's consolidated financial
statements that are incorporated by reference.
POPULAR NORTH AMERICA, INC.
Popular North America (formerly BanPonce Financial Corp.), a wholly
owned subsidiary of Popular International Bank and an indirectly wholly owned
subsidiary of Popular, was organized in 1991 under the laws of the State of
Delaware.
Popular North America functions as a holding company for Popular's mainland
U.S. operations. It does not engage directly in any operational activities other
than providing managerial services to and raising funds for Popular's mainland
U.S. operations. As a bank holding company, Popular North America is registered
under the Bank Holding Company Act.
Following the reorganization, Popular's banking operations in the mainland
U.S. are principally carried out through Banco Popular North America. Popular's
banking operations in Texas are presently carried out through Banco Popular,
N.A. (Texas), which is expected to be merged with and into Banco Popular North
America in 1999. We have focused our activities in the mainland United States on
a number of selected states:
o In New York, we operate 31 branches. As of June 30, 1999, our New York
branches accounted for aggregate assets $2.1 billion and total deposits of
$1.6 billion.
o In Illinois, we operate 19 branches with total assets of $1.3 billion and
deposits of $945.5 million as of June 30,
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1999.
o In California we operate 14 branches with total assets of $425 million and
deposits of $312.6 million as of June 30, 1999.
o We operate 10 branches in New Jersey with total assets of $424.4 million
and deposits of $313.4 million as of June 30, 1999.
o We operate 10 branches in Florida. As of June 30, 1999, our Florida
branches accounted for aggregate assets of $387.1 million and total
deposits of $114.1 million.
o In Texas, we maintain four branches of Banco Popular, N.A. (Texas). As of
June 30, 1999, the Texas branches accounted for aggregate assets of $142.8
million and deposits of $72.9 million.
Other operations of Popular North America are carried out through the
following subsidiaries:
o Popular Cash Express is a retail financial services company offering
services such as check cashing, money transfers to other countries, money
order sales and processing of payments through 42 outlets and 28 mobile
check cashing units in 4 states in the United States. Its assets totaled
$42 million as of June 30, 1999.
o Equity One is a diversified consumer finance company engaged in the
business of making personal and mortgage loans and providing dealer
financing through 129 offices in 38 states with total assets of $1.4
billion as of June 30, 1999.
Summary consolidated financial statements of Popular North America are
included in the notes to Popular's consolidated financial statements that are
incorporated by reference.
If you want to find more information about us, please see the sections
entitled "Where You Can Find More Information" and "Incorporation of Information
We File with the SEC" in this prospectus.
In this prospectus, references to "WE", "US" and "OUR" refer to
Popular, Popular International Bank and Popular North America collectively and
do not include any consolidated subsidiaries. When we refer to "YOUR SECURITY"
and "YOUR PROSPECTUS SUPPLEMENT", we mean the security you have purchased and
the prospectus supplement describing the specific terms of your security. When
we refer to the "ISSUERS", we mean Popular, Popular International Bank and
Popular North America.
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<TABLE>
<CAPTION>
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES OF POPULAR
Period ended Year Ended December 31,
June 30, 1999 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Ratio of Earnings to Fixed Charges:
Excluding Interest on Deposits............. 1.8 1.8 1.8 2.0 2.0 2.6
Including Interest on Deposits............. 1.4 1.4 1.4 1.4 1.4 1.5
Ratio of Earnings to Fixed Charges and
Preferred Stock Dividends:
Excluding Interest on Deposits............. 1.8 1.8 1.8 2.0 2.0 2.5
Including Interest on Deposits............. 1.4 1.4 1.4 1.4 1.4 1.5
</TABLE>
For purposes of computing these consolidated ratios, earnings represents
income before income taxes plus fixed charges. Fixed charges represents all
interest expense (ratios are presented both excluding and including interest on
deposits), the portion of net rental expense which is deemed representative of
the interest factor, the amortization of debt issuance expense and capitalized
interest.
HOLDING COMPANY STRUCTURE
Banco Popular and Banco Popular North America are subject to restrictions
under federal law that limit the transfer of funds from either of the two to any
of Popular, Popular International Bank, Popular North America or Popular
Holdings USA, Inc., a wholly owned subsidiary of Popular North America, and
other non-banking affiliates of Banco Popular and Banco Popular North America.
Popular Holdings USA is registered as a bank holding company under the Bank
Holding Company Act.
A transfer to any non-banking affiliate is limited in amount to 10% of the
transferring institution's capital stock and surplus, and transfers in the
aggregate to all of the non-banking affiliates are limited to an aggregate of
20% of the transferring institution's capital stock and surplus. These
restrictions apply regardless of whether such transfers were in the form of
loans, other extensions of credit, investments or asset purchases. For these
purposes, capital stock and surplus includes the institution's total risk-based
capital plus the balance of its allowance for loan losses not included therein.
Furthermore, such loans and extensions of credit are required to be secured in
specified amounts.
Under the Federal Reserve Board policy, a bank holding company like
Popular, Popular International Bank, Popular North America or Popular Holdings
USA is expected to act as a source of financial strength to each of its
subsidiary banks and to commit resources to support each subsidiary bank. This
support may be required at times when, absent this policy, the bank holding
company might not otherwise provide support. In addition, capital loans by a
bank holding company to its subsidiary depository institutions are subordinated
in right of payment to deposits
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and to certain other indebtedness of the subsidiary depository institution. In
the event of a bank holding company's bankruptcy, a commitment by the bank
holding company to a federal bank regulatory agency to maintain the capital of a
subsidiary depository institution will be assumed by the bankruptcy trustee and
entitled to a priority of payment. Banco Popular, Banco Popular North America
and Banco Popular, N.A. (Texas) are currently the only depository institutions
of Popular, Popular North America, Popular International Bank and Popular
Holdings USA.
The principal source of cash flow for Popular is dividends from Banco
Popular. The principal source of cash flow for Popular International Bank is
Popular North America. The principal source of cash flow for Popular North
America is Banco Popular North America. Various statutory provisions limit the
amount of dividends Banco Popular and Banco Popular North America can pay
without regulatory approval. As member banks subject to the regulation of the
Federal Reserve Board, Banco Popular and Banco Popular North America must obtain
the approval of the Federal Reserve Board for any dividend if the total of all
dividends declared by it in any calendar year would exceed the total of its net
profits, as defined by the Federal Reserve Board, for that year, combined with
its retained net profits for the preceding two years. In addition, a member bank
may not pay a dividend in an amount greater than its undivided profits then on
hand after deducting its losses and bad debts. For this purpose, bad debts are
generally defined to include the principal amount of loans that are past due
with respect to interest by six months or more unless such loans are fully
secured and in the process of collection. Moreover, for purposes of this
limitation, a member bank is not permitted to add the balance in its allowance
for loan losses account to its undivided profits then on hand. A member bank
may, however, net the sum of its bad debts as so defined against the balance in
its allowance for loan losses account and deduct from undivided profits only bad
debts as so defined in excess of that account. At December 31, 1999, Banco
Popular could have declared a dividend of approximately $361 million without the
approval of the Federal Reserve Board. New York law and the National Bank Act
contain similar limitations on the amount of dividends that a bank subsidiary
can pay to its holding company.
The payment of dividends by Banco Popular, Banco Popular North America and
Banco Popular, N.A. (Texas) may also be affected by other regulatory
requirements and policies, such as the maintenance of adequate capital. If the
applicable regulatory authority believes that a depository institution under its
jurisdiction is engaged in, or is about to engage in, an unsafe or unsound
practice (that, depending on the financial condition of the depository
institution, could include the payment of dividends), the regulatory authority
may require, after notice and hearing, that the depository institution cease and
desist from that practice. The Federal Reserve Board has issued a policy
statement that provides that insured banks and bank holding companies should
generally pay dividends only out of current operating earnings. In addition, all
insured depository institutions are subject to the capital-based limitations
required by the Federal Deposit Insurance Act, which we refer to as the FDIA.
As a commercial bank organized under the laws of Puerto Rico, Banco
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Popular is subject to supervision, examination and regulation by the Office of
the Commissioner of Financial Institutions of Puerto Rico, which we refer to as
the Office of the Commissioner, pursuant to the Puerto Rico Banking Act of 1933,
as amended, which we refer to as the Banking Law.
Section 27 of the Banking Law requires that at least 10% of the yearly net
income of Banco Popular be credited annually to a reserve fund. This
apportionment shall be done every year until the reserve fund shall be equal to
the total of paid-in capital on common and preferred stock. At the end of its
most recent fiscal year, Banco Popular had a fund established in compliance with
these requirements.
Section 27 of the Banking Law also provides that when the expenditures of a
bank are greater than the receipts, the excess of the former over the latter
must be charged against the undistributed profits of the bank, and the balance,
if any, must be charged against the reserve fund, as a reduction. If the reserve
fund does not sufficiently cover the balance in whole or in part, the
outstanding amount must be charged against the capital account and no dividend
can be declared until the capital has been restored to its original amount and
the reserve fund to 20% of the original capital.
Section 16 of the Banking Law requires every bank to maintain a legal
reserve that, except as otherwise provided by the Office of the Commissioner,
cannot be less than 20% of its demand liabilities, excluding government deposits
(federal, state and municipal) which are secured by actual collateral.
Furthermore, if a bank is authorized to establish one or more bank branches in a
State of the United States or in a foreign country, where branches are subject
to the reserve requirements of that state or country, the Office of the
Commissioner may exempt the branch or branches of the reserve requirements of
Section 16. However, Banco Popular has been exempted from these requirements,
with respect to deposits payable in Puerto Rico, pursuant to an order of the
Board of Governors of the Federal Reserve System dated November 24, 1982. The
reserve requirements of Section 16 apply to those deposits.
Because Popular, Popular International Bank, Popular North America and
Popular Holdings USA are holding companies, their right to participate in the
assets of any subsidiary upon the subsidiary's liquidation or reorganization
will be subject to the prior claims of the subsidiary's creditors, including
depositors in the case of subsidiary depository institutions, except to the
extent that Popular, Popular International Bank, Popular North America or
Popular Holdings USA, may itself be a creditor with recognized claims against
the subsidiary.
Under the FDIA, a depository institution, the deposits of which are insured
by the FDIC, can be held liable for any loss incurred by, or reasonably expected
to be incurred by, the FDIC in connection with
o the default of a commonly controlled FDIC-insured depository institution or
o any assistance provided by the FDIC to any commonly controlled FDIC-insured
depository institution "in danger of default".
"DEFAULT" is defined generally as the appointment of a conservator or a
receiver and "IN DANGER OF DEFAULT" is defined generally as the existence of
certain
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conditions indicating that a default is likely to occur in the absence of
regulatory assistance. In some circumstances (depending upon the amount of
the loss or anticipated loss suffered by the FDIC), cross-guarantee liability
may result in the ultimate failure or insolvency of one or more insured
depository institutions in a holding company structure. Any obligation or
liability owed by a subsidiary depository institution to its parent company is
subordinated to the subsidiary bank's cross-guarantee liability with respect to
commonly controlled insured depository institutions.
USE OF PROCEEDS
We intend to use the net proceeds from the sale of the securities for
o general corporate purposes, including investments in, or extensions of
credit to, existing and future subsidiaries,
o the acquisition of other banking and financial institutions and
o repayment of outstanding borrowings.
We do not at present have any plans to use the proceeds from any offering
for a material acquisition or to repay outstanding borrowings. All or a
substantial portion of the proceeds from the sale of securities issued by
Popular North America will be loaned by Popular North America to its direct or
indirect subsidiaries, including Equity One, or used by Popular North America
for general corporate purposes. The net proceeds from the sale of securities by
Popular International Bank will be loaned by Popular International Bank to its
affiliates or used by Popular International Bank for general corporate purposes.
The precise amounts and timing of the application of proceeds will depend on
various factors existing at the time of offering of the securities, including
Popular's subsidiaries' funding requirements and the availability of other
funds. Until used, the proceeds may be temporarily invested in short-term
obligations.
LEGAL OWNERSHIP OF SECURITIES
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Please note that in this prospectus, the term "holders" means those who own
securities registered in their own names on the books that we or the trustee
maintain for this purpose and not those who own beneficial interests in
securities registered in "street name" or in securities issued in book-entry
form through The Depository Trust Company.
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We refer to those who have securities registered in their own names, on the
books that we or the trustee maintain for this purpose, as the "HOLDERS" of
those securities. These persons are the legal holders of the securities. We
refer to those who, indirectly through others, own beneficial interests in
securities that are not registered in their own names as "INDIRECT HOLDERS" of
those securities. As we discuss below, indirect holders are not legal holders,
and investors in securities issued in book-
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entry form or in street name will be indirect holders.
BOOK-ENTRY HOLDERS
We will issue each security in book-entry form only, unless we specify
otherwise in the applicable prospectus supplement. Therefore, securities
represented by one or more global securities are registered in the name of a
financial institution that holds them as depository on behalf of other financial
institutions that participate in the depository's book-entry system. These
participating institutions, in turn, hold beneficial interests in the securities
on behalf of themselves or their customers.
Under the indentures, only the person in whose name a security is
registered is recognized as the holder of that security. Consequently, for
securities issued in global form, we will recognize only the depository as the
holder of the securities, and we will make all payments on the securities to the
depository. The depository passes along the payments it receives to its
participants, which in turn pass the payments along to their customers who are
the beneficial owners. The depository and its participants make these payments
under agreements they have made with one another or with their customers; they
are not obligated to do so under the terms of the securities.
As a result, investors will not own securities directly. Instead, they will
own beneficial interests in a global security, through a bank, broker or other
financial institution that participates in the depository's book-entry system or
holds an interest through a participant. As long as the securities are issued in
global form, investors will be indirect holders, and not holders, of the
securities.
STREET NAME HOLDERS
In the future we may terminate a global security or issue securities
initially in non-global form. In these cases, investors may choose to hold their
securities in their own names or in "street name". Securities held by an
investor in street name would be registered in the name of a bank, broker or
other financial institution that the investor chooses, and the investor would
hold only a beneficial interest in those securities through an account he or she
maintains at that institution.
For securities held in street name, we will recognize only the intermediary
banks, brokers and other financial institutions in whose names the securities
are registered as the holders of those securities, and we will make all payments
on those securities to them. These institutions pass along the payments they
receive to their customers who are the beneficial owners, but only because they
agree to do so in their customer agreements or because they are legally required
to do so. Investors who hold securities in street name will be indirect holders,
not holders, of those securities.
LEGAL HOLDERS
Our obligations, as well as the obligations of the trustee and those of any
third parties employed by us or the trustee, run only to the holders of
securities. We do not have obligations to investors who hold beneficial
interests in street name, in global securities or by any other indirect means.
This will be the case whether an investor chooses to be an indirect holder of a
security or has no choice because we issue the securities only in global form.
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For example, once we make payment or give a notice to the holder, we have
no further responsibility for that payment or notice even if that holder is
required, under agreements with depository participants or customers or by law,
to pass it along to the indirect holders but does not do so. Similarly, if we
want to obtain the approval of the holders for any purpose -- e.g., to amend the
indentures or to relieve us of the consequences of a default or of our
obligation to comply with a particular provision of the indenture -- we would
seek the approval only from the holders, and not the indirect holders, of the
securities. Whether and how the holders contact the indirect holders is up to
the holders.
When we refer to "YOU", we mean those who invest in the securities being
offered by this prospectus, whether they are the holders or only indirect
holders of those securities. When we refer to "YOUR SECURITIES", we mean the
securities in which you hold a direct or indirect interest.
DESCRIPTION OF DEBT SECURITIES WE MAY OFFER
INFORMATION ABOUT OUR DEBT SECURITIES
As required by U.S. federal law for all debt securities of companies that
are publicly offered, the debt securities issued under this prospectus are
governed by documents called "INDENTURES". The indentures are contracts between
us and The First National Bank of Chicago, which currently acts as "TRUSTEE"
under each of the indentures. The trustee has two main roles:
o First, the trustee can enforce your rights against us if we default.
There are some limitations on the extent to which the trustee acts on
your behalf, described later under "-- Default and Remedies"; and
o Second, the trustee performs administrative duties for us, such as
sending you interest payments, and transferring your debt security to a
new buyer if you sell and sending you notices.
The indentures permit us to issue different series of debt securities from
time to time. We may issue debt securities in such amounts, at such times and on
such terms as we wish. The debt securities will differ from one another in their
terms.
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Popular may issue senior debt securities under an indenture dated as of
February 15, 1995, as supplemented by the First Supplemental Indenture dated as
of May 8, 1997. Both indentures are between Popular and the trustee. Popular may
issue subordinated debt securities under an Indenture dated as November 30, 1995
between Popular and the trustee. Popular North America may issue senior debt
securities under an Indenture dated as of October 1, 1991, as supplemented by
the First Supplemental Indenture dated as of February 28, 1995 and by the Second
Supplemental Indenture dated as of May 8, 1997. These three indentures for
Popular North America's senior debt securities are each among Popular, Popular
North America and the trustee. If Popular International Bank issues either
senior or subordinated debt securities or if Popular North America issues
subordinated debt securities, it will enter into an appropriate indenture with a
trustee.
The indentures mentioned in the previous paragraph are referred to
collectively as the "INDENTURES". The debt securities issued under the
indentures referred to in the previous paragraph are referred to collectively as
the "DEBT SECURITIES". The senior debt securities of Popular, Popular
International Bank and Popular North America are referred to collectively as the
"SENIOR DEBT SECURITIES" and the subordinated debt securities of Popular,
Popular International Bank and Popular North America are referred to
collectively as the "SUBORDINATED DEBT SECURITIES". A copy or form of each
indenture is filed as an exhibit to the registration statement relating to the
debt securities.
Unless otherwise indicated in the applicable prospectus supplement, the
covenants contained in the indentures and the debt securities will not afford
holders of the debt securities protection in the event of a sudden decline in
credit rating that might result from a recapitalization, restructuring or other
highly leveraged transaction.
This section summarizes the material terms that will apply generally to a
series of debt securities. Each particular debt security will have financial and
other terms specific to it, and the specific terms of each debt security will be
described in a prospectus supplement attached to the front of this prospectus.
Those terms may vary from the terms described here. As you read this section,
therefore, please remember that the specific terms of your debt security as
described in your prospectus supplement will supplement and, if applicable, may
modify or replace the general terms described in this section. The statements we
make in this section may not apply to your debt security.
AMOUNTS THAT WE MAY ISSUE
The indentures do not limit the aggregate amount of debt securities that we
may issue, nor do they limit the aggregate amount of any particular series. We
have initially authorized the issuance of debt securities and preferred stock
having an initial offering price no greater than $1,500,000,000, or an
equivalent amount in any other currencies or currency units. We may, however,
increase this authorized amount at any time without your consent.
The indentures and the debt securities do not limit our ability to incur
other indebtedness or to issue other securities. Also, we are not subject to
financial or similar restrictions by the terms
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of the debt securities, except as described under "--Restrictive Covenants"
below.
HOW THE DEBT SECURITIES RANK AGAINST OTHER DEBT
The debt securities will not be secured by any property or assets of the
issuers. Thus, by owning a debt security, you are one of our unsecured
creditors. The senior debt securities will not be subordinated to any of our
other debt obligations. This means that, in a bankruptcy or liquidation
proceeding against us, the senior debt securities would rank equally in right of
payment with all of our other unsecured and unsubordinated indebtedness. The
subordinated debt securities may be subordinated to any of our other debt
obligations as described in "--Special Terms Relating to the Subordinated Debt
Securities" below.
THIS SECTION IS ONLY A SUMMARY
The indentures and their associated documents, including your debt
security, contain the full legal text of the matters described in this section
and your prospectus supplement. The indentures and the debt securities are
governed by New York law. A copy of each indenture or form of indenture has been
filed with the SEC as part of our registration statement. See "--Where You Can
Find More Information" below for information on how to obtain a copy.
Because this section and your prospectus supplement provide only a summary,
they do not describe every aspect of the indentures and your debt security. For
example, in this section and your prospectus supplement, we use terms that have
been given special meaning in the indentures. In this section, however, we
describe the meaning for only the more important of those terms.
FEATURES COMMON TO ALL DEBT SECURITIES
STATED MATURITY AND MATURITY
The day on which the principal amount of your debt security is
scheduled to become due and payable is called the "STATED MATURITY" of the
principal and is specified in your prospectus supplement. The principal may
become due sooner, by reason of redemption or acceleration after a default. The
day on which the principal actually becomes due, whether at the stated maturity
or earlier, is called the "MATURITY" of the principal.
We also use the terms "stated maturity" and "maturity" to refer to the
dates when other payments become due. For example, we may refer to a regular
interest payment date when an installment of interest is scheduled to become due
as the "stated maturity" of that installment. When we refer to the "stated
maturity" or the "maturity" of a debt security without specifying a particular
payment, we mean the stated maturity or maturity, as the case may be, of the
principal.
CURRENCY OF DEBT SECURITIES
Amounts that become due and payable on your debt security will be
payable in a currency, composite currency or basket of currencies specified in
your prospectus supplement.
We call this currency, composite currency or basket of currencies a
"SPECIFIED CURRENCY". The specified currency for your debt security will be U.S.
dollars unless your
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prospectus supplement states otherwise. A specified currency may include the
euro. Some debt securities may have different specified currencies for principal
and interest.
You will have to pay for your debt securities by delivering the requisite
amount of the specified currency for the principal to the dealer or dealers that
we name in your prospectus supplement, unless other arrangements have been made
between you and us or between you and that dealer or dealers. We will make
payments on your debt securities in the specified currency, except as described
below in "-- Payment Mechanics".
TYPES OF DEBT SECURITIES
We may issue the following types of debt securities:
o FIXED RATE DEBT SECURITIES. A debt security of this type will bear
interest at a fixed rate described in the applicable pricing supplement.
This type includes "ZERO COUPON DEBT SECURITIES", which bear no interest
and are instead issued at a price lower than the principal amount.
o FLOATING RATE DEBT SECURITIES. A debt security of this type will bear
interest at rates that are determined by reference to an interest rate
formula. In some cases, the rates may also be adjusted by adding or
subtracting a spread or multiplying by a spread multiplier and may be
subject to a minimum rate or a maximum rate. If your debt security is a
floating rate debt security, the formula and any adjustments that apply
to the interest rate will be described in your prospectus supplement.
o INDEXED DEBT SECURITIES. A debt security of this type provides that the
principal amount payable at its maturity, and/or the amount of interest
payable on an interest payment date, will be determined by reference to
one or more currencies, commodities or stocks, including baskets of
stocks and stock indices, or to any other index described in the
applicable prospectus supplement. If you are a holder of an indexed debt
security, you may receive a principal amount at maturity that is greater
than or less than the face amount of your debt security depending upon
the value of the applicable index at maturity. That value may fluctuate
over time. Some indexed debt securities may also be exchangeable, at the
option of the holder or the applicable issuer, into stock of an issuer
other than the applicable issuer. If you purchase an indexed debt
security, your prospectus supplement will include information about the
relevant index and about how amounts that are to become payable will be
determined by reference to that index. If you purchase a security
exchangeable into stock of an issuer other than the applicable issuer,
your prospectus supplement will include information about the issuer and
may also tell you where additional information is available. Before you
purchase any indexed debt security, you should read carefully the section
of your prospectus supplement entitled "Risks Relating to Indexed Debt
Securities".
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A fixed rate debt security, a floating rate debt security or an indexed
debt security may be an "ORIGINAL ISSUE DISCOUNT DEBT SECURITY". A debt security
of this type is issued at a price lower than its principal amount and provides
that, upon redemption or acceleration of its maturity, an amount less than its
principal amount will be payable. A debt security issued at a discount to its
principal may, for U.S. federal income tax purposes, be considered an original
issue discount debt security, regardless of the amount payable upon redemption
or acceleration of maturity.
INFORMATION IN THE PROSPECTUS SUPPLEMENT
Your prospectus supplement will describe one or more of the following terms
of your debt security:
o the title;
o the stated maturity;
o whether your debt security is a senior or subordinated debt security;
o the specified currency or currencies for principal and interest, if not
U.S. dollars;
o the price at which we originally issue your debt security, expressed as a
percentage of the principal amount, and the original issue date;
o whether your debt security is a fixed rate debt security, a floating rate
debt security or an indexed debt security, and also whether it is an
original issue discount debt security;
o if your debt security is a fixed rate debt security, the rate at which
your debt security will bear interest, if any, and the interest payment
dates;
o if your debt security is a floating rate debt security, the interest rate
basis; any applicable index, currency or maturity, spread or spread
multiplier or initial, maximum or minimum rate; the interest reset,
determination, calculation and payment dates; and the calculation agent;
o if your debt security is an original issue discount debt security, the
yield to maturity;
o if your debt security is an indexed debt security, the principal amount
we will pay you at maturity, the amount of interest, if any, we will pay
you on an interest payment date or the formula we will use to calculate
these amounts, if any, and whether your debt security will be
exchangeable for or payable in stock of an issuer other than the
applicable issuer or other property;
o whether your debt security may be redeemed or repaid by us at our or the
holder's option prior to the stated maturity and, if so, other relevant
terms such as the redemption commencement date, repayment date(s),
redemption price(s) and redemption period(s), all of which we describe
under "-- Redemption and Repayment" below;
o whether we will issue or make available your debt security in non-
book-entry form;
o the denominations in which securities will be issued (if other than
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integral multiples of U.S. $1,000); and
o any other terms of your debt security that are not inconsistent with the
provisions of the indentures.
SPECIAL CONSIDERATIONS FOR INDIRECT HOLDERS
If the issuer permits you to hold debt securities through a bank, broker or
other financial institution, either in book-entry form or in street name, you
should check with your own institution to find out:
o how it handles securities payments and notices;
o whether it imposes fees or charges;
o how it would handle a request for the holder's consent, if ever required;
o whether and how you can instruct it to send you debt securities
registered in your own name so you can be a holder, if that is permitted
in the future;
o how it would exercise rights under the debt securities if there were a
default or other event triggering the need for holders to act to protect
their interests; and
o if the debt securities are in book-entry form, how the depository's rules
and procedures will affect these matters.
WHAT IS A GLOBAL DEBT SECURITY?
We will issue each debt security in book-entry form only, unless we specify
otherwise in the applicable prospectus supplement. Each debt security issued in
book-entry form will be represented by a "GLOBAL DEBT SECURITY" that we will
deposit with and register in the name of a financial institution or its nominee,
that we select. The financial institution that we select for this purpose is
called the "DEPOSITORY". Unless we say otherwise in the applicable prospectus
supplement, The Depository Trust Company, New York, New York, known as DTC, will
be the depository for all debt securities issued in book-entry form.
A global debt security may represent one or any other number of individual
debt securities. Generally, all debt securities represented by the same global
debt security will have the same terms. We may, however, issue a global debt
security that represents multiple debt securities that have different terms and
are issued at different times. We call this kind of global debt security a
"MASTER GLOBAL DEBT SECURITY".
A global debt security may not be transferred to or registered in the name
of anyone other than the depository or its nominee, unless special termination
situations arise. We describe those situations below under "-- Special
Situations When a Global Debt Security Will Be Terminated". As a result of these
arrangements, the depository, or its nominee, will be the sole registered owner
and holder of all debt securities represented by a global debt security, and
investors will be permitted to own only beneficial interests in a global debt
security. Beneficial interests must be held by means of an account with a
broker, bank or other
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financial institution that in turn has an account with the depository or with
another institution that does. Thus, an investor whose debt security is
represented by a global debt security will not be a legal holder of the debt
security, but only an indirect holder of a beneficial interest in the global
debt security.
If the prospectus supplement for a particular debt security indicates that
the debt security will be issued in "global form only", then the debt security
will be represented by a global debt security at all times unless and until the
global debt security is terminated under one of the special situations described
below under "--Special Situations When a Global Debt Security Will Be
Terminated". The global debt security may be a master global debt security,
although your prospectus supplement will not indicate whether it is a master
global debt security.
SPECIAL CONSIDERATIONS FOR GLOBAL DEBT SECURITIES .
As an indirect holder, an investor's rights relating to a global debt
security will be governed by the account rules of the investor's financial
institution and of the depository, as well as general laws relating to
securities transfers. We do not recognize this type of investor as a legal
holder of debt securities and instead deal only with the depository that holds
the global debt security.
If debt securities are issued only in the form of a global debt security,
an investor should be aware of the following:
o An investor cannot get the debt securities registered in his or her own
name and cannot get non-global certificates for his or her interest in
the debt securities, except in the special situations we describe below;
o An investor will be an indirect holder and must look to his or her own
bank or broker for payments on the debt securities and protection of his
or her legal rights relating to the debt securities, as we describe under
"-- Legal Ownership of Securities" above;
o An investor may not be able to sell interests in the debt securities to
some insurance companies and other institutions that are required by law
to own their securities in non-book-entry form;
o The depository's policies, which may change from time to time, will
govern payments, transfers, exchanges and other matters relating to the
investor's interest in a global debt security. We and the trustee have no
responsibility for any aspect of the depository's actions or for its
records of ownership interests in a global debt security. We and the
trustee also do not supervise the depository in any way;
o The depository may require that those who purchase and sell interests in
a global debt security within its book-entry system use immediately
available funds, and your broker or bank may require you to do so as
well; and
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o Financial institutions that participate in the depository's book-entry
system, and through which an investor holds its interest in the global
debt securities, may also have their own policies affecting payments,
notices and other matters relating to the debt securities. There may be
more than one financial intermediary in the chain of ownership for an
investor. We do not monitor and are not responsible for the actions of
any of those intermediaries.
SPECIAL SITUATIONS WHEN A GLOBAL DEBT SECURITY WILL BE TERMINATED.
In a few special situations described below, a global debt security will be
terminated and interests in it will be exchanged for certificates in non-global
form representing the debt securities it represented. After that exchange, the
choice of whether to hold the debt securities directly or in street name will be
up to the investor. Investors must consult their own banks or brokers to find
out how to have their interests in a global debt security transferred on
termination to their own names, so that they will be legal holders. We have
described the rights of holders and street name investors above under "Legal
Ownership of Debt Securities".
The special situations for termination of a global debt security are:
o when the depository notifies us that it is unwilling, unable or no longer
qualified to continue as depository for that global debt security and we
do not appoint another institution to act as depository within 60 days;
o when we notify the trustee that we wish to terminate that global debt
security; or
o when an event of default has occurred with regard to debt securities
represented by that global debt security and has not been cured or
waived; we discuss defaults below under "-- Default and Remedies".
When a global debt security is terminated, only the depository, and not we
or the trustee, is responsible for deciding the names of the institutions in
whose names the debt securities represented by the global debt security will be
registered and, therefore, who will be the holders of those debt securities.
REDEMPTION AND REPAYMENT
Unless otherwise indicated in your prospectus supplement, your debt
security will not be entitled to the benefit of any sinking fund -- that is, we
will not deposit money on a regular basis into any separate custodial account to
repay your debt securities. In addition, we will not be entitled to redeem your
debt security before its stated maturity unless your prospectus supplement
specifies a redemption commencement date. You will not be entitled to require us
to buy your debt security from you, before its stated maturity, unless your
prospectus supplement specifies one or more repayment dates.
If your prospectus supplement specifies a redemption commencement date or a
repayment date, it will also specify one
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or more redemption prices or repayment prices, which will be expressed as a
percentage of the principal amount of your debt security. It may also specify
one or more redemption periods during which the redemption prices relating to a
redemption of debt securities will apply.
If your prospectus supplement specifies a redemption commencement date,
your debt security will be redeemable at our option at any time on or after that
date. If we redeem your debt security, we will do so at the specified redemption
price, together with interest accrued to the redemption date. If different
prices are specified for different redemption periods, the price we pay will be
the price that applies to the redemption period during which your debt security
is redeemed.
If your prospectus supplement specifies a repayment date, your debt
security will be repayable at your option on the specified repayment date at the
specified repayment price, together with interest accrued to the repayment date.
In the event that we exercise an option to redeem any debt security, we
will give to the trustee and the holder written notice of the principal amount
of the debt security to be redeemed, not less than 30 days nor more than 60 days
before the applicable redemption date. Notice of this redemption will be mailed
to holders at the address that appears on the register of the redeemed debt
securities.
If a debt security represented by a global debt security is subject to
repayment at the holder's option, the depository or its nominee, as the holder,
will be the only person that can exercise the rights to repayment. Any indirect
holders who own beneficial interests in the global debt security and wish to
exercise a repayment right must give proper and timely instructions to their
banks or brokers through which they hold their interests, requesting that they
notify the depository to exercise the repayment right on their behalf. Different
firms have different deadlines for accepting instructions from their customers,
and you should take care to act promptly enough to ensure that your request is
given effect by the depository before the applicable deadline for exercise.
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Street name and other indirect holders should contact their banks or brokers for
information about how to exercise a repayment right in a timely manner.
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In the event that the option of the holder to elect repayment as described
above is deemed to be a "tender offer" within the meaning of Rule 14e-1 under
the Securities Exchange Act of 1934, we will comply with Rule 14e-1 as then in
effect to the extent applicable.
We or our affiliates may purchase debt securities from investors who are
willing to sell from time to time, either in the open market at prevailing
prices or in private transactions at negotiated prices. Debt securities that we
or they purchase may, at our discretion, be held, resold or canceled.
A change in law, regulation or interpretation could oblige Popular or
Popular International Bank to pay the additional amounts that are discussed in
"Taxation by the Commonwealth of Puerto
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Rico" below. If this happens, we may redeem or repay an entire series of the
debt securities at our discretion after giving between 30 and 60 days' notice to
the holders. The redemption price or repayment price would be set forth in the
applicable prospectus supplement.
MERGERS AND SIMILAR TRANSACTIONS
We are generally permitted to merge or consolidate with another entity. We
are also permitted to sell substantially all our assets to another firm. We may
not take any of these actions, however, unless all the following conditions are
met:
o If the successor firm in the transaction is not one of the issuers, the
successor firm must expressly assume our obligations in respect of the
debt securities, the guarantees and the indentures.
o Immediately after the transaction, no default under the indentures or
debt securities has occurred and is continuing. For this purpose,
"default under the indentures or debt securities" means an event of
default or any event that would be an event of default if the
requirements for giving us default notice and for our default having to
continue for a specific period of time were disregarded. We describe
these matters below under "-- Default and Remedies".
These conditions will apply only if we wish to merge, consolidate or sell
substantially all our assets. We will not need to satisfy these conditions if we
enter into other types of transactions, including any transaction in which we
acquire the stock or assets of another firm, any transaction that involves a
change of control of one of us but in which we do not merge or consolidate and
any transaction in which we sell less than substantially all our assets.
RESTRICTIVE COVENANTS
In the senior indentures, Popular and Popular North America promise not to
sell, transfer or otherwise dispose of any voting stock of Banco Popular or, in
the case of Popular, permit Banco Popular to issue, sell or otherwise dispose of
any of its voting stock, unless, after giving effect to the transaction, Banco
Popular remains a controlled subsidiary (as defined below), except as provided
above under "-- Mergers and Similar Transactions".
In addition, Popular may not permit Banco Popular to:
o merge or consolidate, unless the survivor is a controlled subsidiary, or
o convey or transfer its properties and assets substantially as an
entirety, except to one or more controlled subsidiaries.
The senior indentures define "VOTING STOCK" as the stock of the class or
classes having general voting power under ordinary circumstances to elect at
least a majority of the board of directors, managers or trustees of a
corporation. Stock that may vote only if an event occurs that is beyond the
control of its holders is not considered voting stock under the senior
indentures, whether or not the event has happened. "CONTROLLED SUBSIDIARY" means
any corporation of which
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an issuer owns more than 80% of the outstanding voting stock.
Popular also promises in the senior indentures not to, nor to permit any
material banking subsidiary to, create, incur or permit to exist any
indebtedness for borrowed money secured by a lien or other encumbrance on the
voting stock of any material banking subsidiary unless Popular's debt
securities, Popular's guarantees of Popular North America's senior debt
securities and, at Popular's discretion, any other indebtedness with a right of
payment equal or senior to Popular's debt securities and Popular's guarantees of
Popular North America's senior debt securities are secured on an equal or
priority basis. "MATERIAL BANKING SUBSIDIARY" means any controlled subsidiary
chartered as a banking corporation under federal, state or Puerto Rico law that
is a significant subsidiary of Popular as defined in Rule 1-02 of Regulation S-X
of the Rules and Regulations of the Commission. As of the date of this
prospectus, Banco Popular and Banco Popular North America are the only material
banking subsidiaries of Popular.
Liens imposed to secure taxes, assessments or governmental charges or
levies are not restricted, however, provided they are:
o being contested in good faith;
o are less than $10,000,000 in amount;
o the result of any litigation or legal proceeding which is currently being
contested in good faith or which involve claims of less than $10,000,000;
or
o deposits to secure surety, stay, appeal or customs bonds.
The subordinated indentures do not contain similar restrictions.
DEFAULT AND REMEDIES
Every year we are required to send the trustee a report on our performance
of our obligations under the senior indentures and the subordinated indentures
and on any default. You will have special rights if an event of default with
respect to your senior debt security occurs and is not cured, as described in
this subsection.
EVENTS OF DEFAULT
SENIOR INDENTURES. With respect to your senior debt security, the term
"EVENT OF DEFAULT" means any of the following:
o We do not pay the principal or any premium on any senior debt security on
its due date;
o We do not pay interest on any senior debt security within 30 days after
its due date;
o We do not deposit a sinking fund payment with regard to any senior debt
security on its due date, but only if the payment is required in the
applicable prospectus supplement;
o We remain in breach of our covenant described under "--Restrictive
Covenants" above, or any other covenant we make in the senior indentures
for the benefit of the debt securities, for 60 days after we
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receive a notice of default stating that we are in breach. However, the
breach of a covenant that the senior indentures expressly impose only on
a different series of senior debt securities than the series of which
your senior debt security is a part will not be an event of default with
respect to your senior debt security;
o We default under borrowed money debt (see below) totaling $10,000,000 or
more, our obligation to repay that debt is accelerated by our lenders and
our repayment obligation remains accelerated, unless the debt is paid,
the default is cured or waived or the acceleration is rescinded within 30
days after we receive a notice of default. However, a notice of default
must be sent by the trustee or the holders of at least 25% of the
principal amount of senior debt securities;
o We file for bankruptcy, or other events of bankruptcy, insolvency or
reorganization relating to an issuer or material banking subsidiary
occur; or
o If your prospectus supplement states that any additional event of default
applies to your senior debt security, that event of default occurs.
"BORROWED MONEY DEBT" means any of our indebtedness for borrowed money or
the indebtedness of a material banking subsidiary, other than the series of
which your senior debt security is a part.
The trustee may withhold notice of a continuing default, except in the
payment of the principal of or any premium or interest on any senior debt
securities if the trustee considers it in the interest of the holders.
SUBORDINATED INDENTURES. With respect to your subordinated debt security,
the term "EVENT OF DEFAULT" means that a filing for bankruptcy or other events
of bankruptcy, insolvency or reorganization relating to an issuer occurs. The
subordinated indentures do not provide for any right of acceleration of the
payment of principal upon a default in the payment of principal or interest or
in the performance of any covenant or agreement on a series of subordinated debt
securities or on the subordinated indentures.
REMEDIES IF AN EVENT OF DEFAULT OCCURS
The holders of not less than a majority in principal amount of the debt
securities may waive a default for all the debt securities. If this happens, the
default will be treated as if it had not occurred.
SENIOR INDENTURES. If an event of default on the senior debt securities has
occurred and has not been cured or waived, the trustee or the holders of at
least 25% in principal amount of the outstanding senior debt securities may
declare the entire principal amount of the senior debt securities to be due
immediately. If an event of default occurs because of events in bankruptcy,
insolvency or reorganization relating to an issuer or material banking
subsidiary, the entire principal amount of the senior debt securities will be
automatically accelerated, without any action by the trustee or any holder.
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Each of these situations is called an "acceleration of the maturity" of the
senior debt securities. If the maturity of any senior debt securities is
accelerated, the holders of at least a majority in principal amount of the
senior debt securities affected by the acceleration may cancel the acceleration
for all of those senior debt securities.
SUBORDINATED INDENTURES. If an event of default on the subordinated debt
securities of a series has occurred and has not been cured or waived, the
trustee or the holders of at least 25% in principal amount of the outstanding
subordinated debt securities of that series may declare the entire principal
amount of that series of subordinated debt securities to be due immediately.
This situation is called an acceleration of the maturity of those subordinated
debt securities. If the maturity of any subordinated debt securities is
accelerated, the holders of at least a majority in principal amount of the
subordinated debt securities of that series affected by the acceleration may
cancel the acceleration for all the affected subordinated debt securities.
TRUSTEE'S INDEMNITY
If an event of default on any series of debt securities occurs, the trustee
for those securities will have special duties. In that situation, the trustee
will be obligated to use those of its rights and powers under the indenture, and
to use the same degree of care and skill in doing so, that a prudent person
would use in that situation in conducting his or her own affairs.
As described in the prior paragraph, the trustees are not required to take
any action under any of the indentures at the request of any holders unless the
holders of that series offer the trustee reasonable protection from expenses and
liability. This is called an "indemnity". If reasonable indemnity is provided,
the holders of a majority in principal amount of all of the outstanding debt
securities of that series may direct the time, method and place of conducting
any lawsuit or other formal legal action seeking any remedy available to the
trustee. These majority holders of that series may also direct the trustee in
performing any other action under the indenture with respect to the debt
securities of that series.
Before you can bypass the trustee and bring your own lawsuit or other
formal legal action or take other steps to enforce your rights or protect your
interests relating to your debt securities, the following must occur:
o You must give the trustee written notice that an event of default has
occurred, and the event of default must not have been cured or waived;
o The holders of not less than 25% in principal amount of all debt
securities of that series must make a written request that the trustee
take action because of the default, and they or you must offer reasonable
indemnity to the trustee against the cost and other liabilities of taking
that action;
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o The trustee must not have taken action for 60 days after receipt of the
above notice and offer of indemnity; and
o During those 60 days, the holders of a majority in principal amount of
the debt securities must not have given the trustee directions that are
inconsistent with the written request of the holders of not less than 25%
in principal amount of the debt securities of that series.
You are, however, entitled at any time to bring a lawsuit for the payment of
money due on your debt security on or after its due date.
Book-entry and other indirect holders should consult their banks or brokers for
information on how to give notice or direction to or make a request of the
trustee and how to declare or cancel an acceleration of the maturity.
MODIFICATION AND WAIVER OF THE INDENTURES
There are three types of changes we can make to the indentures and the debt
securities.
CHANGES REQUIRING YOUR APPROVAL
First, there are changes that cannot be made without the approval of each
holder of a debt security affected by the change. Here is a list of this type of
changes:
o change the stated maturity for any principal or interest on a debt
security;
o reduce the principal amount, the amount payable on acceleration of the
maturity after a default, the interest rate or the redemption price of a
debt security;
o impair any right a holder may have to require repayment of its debt
security;
o change the currency of any payment on a debt security;
o change the place of payment on a debt security, if it is in non-global
form;
o impair a holder's right to sue for payment of any amount due on its debt
security;
o reduce the percentage in principal amount of the debt securities and any
other affected series of debt securities, taken together, the approval of
whose holders is needed to change the indentures or the debt securities;
o reduce the percentage in principal amount of the debt securities and any
other affected series of debt securities, taken separately or together,
as the case may be, the consent of whose holders is needed to modify or
amend the indenture or waive our compliance with the indentures or to
waive defaults;
o modify the subordination provision of the subordinated indentures, unless
the change would not adversely affect the interests of the
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holders in that series of debt securities; and
o in the case of Popular North America's and Popular International Bank's
indentures, modify the terms and conditions of the guarantor's
obligations regarding the due and punctual payment of principal or any
premium, interest, additional amounts we describe below under "Taxation
by the Commonwealth of Puerto Rico" or sinking fund payment.
CHANGES NOT REQUIRING APPROVAL
The second type of changes does not require any approval by holders of debt
securities. This type is limited to clarifications and changes that would not
adversely affect the interests of the holders in the debt securities in any
material respect. Nor do we need your consent to make changes that affect only
other debt securities to be issued after the changes take effect.
We may also make changes or obtain waivers that do not adversely affect a
particular debt security, even if they affect other debt securities or series of
debt securities. In those cases, we do not need to obtain the approval of the
holder of that debt security; we need only obtain any required approvals from
the holders of the affected debt securities or other debt securities.
CHANGES REQUIRING MAJORITY APPROVAL
Any other changes to the indentures and the debt securities would require
the following approval:
o If the change affects only one series of debt securities, it must be
approved by the holders of a majority in principal amount of that series.
o If the change affects more than one series of debt securities, it must be
approved by the holders of a majority in principal amount of all series
of debt securities affected by the change, with all the series of debt
securities voting together as one class for this purpose.
In each case, the required approval must be given by written consent.
The same majority approval would be required for us to obtain a waiver of
any of our covenants in the indentures. Our covenants include the promises we
make about merging and putting liens on our interests, which we describe above
under "--Mergers and Similar Transactions" and "--Restrictive Covenants". If the
holders approve a waiver of a covenant, we will not have to comply with it. The
holders, however, cannot approve a waiver of any provision in a particular debt
security, or in the indenture as it affects that debt security, that we cannot
change without the approval of the holder of that debt security as described
above in "--Changes Requiring Your Approval", unless that holder approves the
waiver.
Book-entry and other indirect holders should consult their banks or brokers for
information on how approval may be granted or denied if we seek to change the
indentures or the debt securities or request a waiver.
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FORM, EXCHANGE AND TRANSFER
If the debt securities cease to be issued in global form, those debt
securities will be issued:
o only in fully registered form; and
o unless we indicate otherwise in your prospectus supplement, in
denominations of $1,000 and multiples of $1,000.
Holders may exchange their debt securities for debt securities of smaller
denominations or combined into fewer debt securities of larger denominations, as
long as the total principal amount is not changed. This is called an "EXCHANGE".
Holders may exchange or transfer their debt securities at the office of the
trustee. We have appointed the trustee to act as our agent for registering debt
securities in the names of holders and transferring debt securities. We may
appoint another entity to perform these functions or perform them ourselves.
Holders will not be required to pay a service charge to transfer or
exchange their debt securities, but they may be required to pay for any tax or
other governmental charge associated with the exchange or transfer. The transfer
or exchange will be made only if our transfer agent is satisfied with the
holder's proof of legal ownership.
If we have designated additional transfer agents for your debt security,
they will be named in your prospectus supplement. We may appoint additional
transfer agents or cancel the appointment of any particular transfer agent. We
may also approve a change in the office through which any transfer agent acts.
If any debt securities are redeemable and we redeem less than all those
debt securities, we may prohibit the transfer or exchange of those debt
securities during the period beginning 15 days before the day we mail the notice
of redemption and ending on the day of that mailing, in order to freeze the list
of holders to prepare the mailing. We may also refuse to register transfers or
exchanges of any debt security selected for redemption, except that we will
continue to permit transfers and exchanges of the unredeemed portion of any debt
security being partially redeemed.
If a debt security is issued as a global debt security, only the depository
will be entitled to transfer and exchange the debt security as described in this
subsection since it will be the sole holder of the debt security.
PAYMENT MECHANICS
WHO RECEIVES PAYMENT?
If interest is due on a debt security on an interest payment date, we will
pay the interest to the person or entity in whose name the debt security is
registered at the close of business on the regular record date (see below)
relating to the interest payment date. If interest is due at the maturity but on
a day that is not an interest payment date, we will pay the interest to the
person or entity registered at the close of business on the relevant record date
provided by the debt security unless otherwise provided in the security and the
applicable prospectus
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supplement. If principal or another amount besides interest is payable on a debt
security at the maturity, we will pay the amount to the holder of the debt
security against surrender of the debt security at a proper place of payment
(or, in the case of a global debt security, in accordance with the applicable
policies of the depository).
We will specify in the applicable prospectus supplement the regular record
date relating to an interest payment date for any fixed rate debt security and
for any floating rate debt security. We will also specify the "close of
business" on a regular record date when business is not being conducted.
HOW WE WILL MAKE PAYMENTS DUE IN U.S. DOLLARS
We will follow the practice described in this subsection when paying
amounts payable in U.S. dollars. Payments of amounts payable in other currencies
will be made as described in the next subsection.
PAYMENTS ON GLOBAL DEBT SECURITIES. We will make payments on a global debt
security in accordance with the applicable policies of the depository as in
effect from time to time. Under those policies, we will pay directly to the
depository, or its nominee, and not to any indirect holders who own beneficial
interests in the global debt security. An indirect holder's right to receive
those payments will be governed by the rules and practices of the depository and
its participants, as described above under "--What is a Global Debt Security?".
PAYMENTS ON NON-GLOBAL DEBT SECURITIES. We will make payments on a debt
security in non-global form as follows.
o We will pay interest that is due on an interest payment date by check
mailed on the interest payment date to the holder at his or her address
shown on the trustee's records as of the close of business on the regular
record date.
o We will make all other payments by check at the paying agent described
below, against surrender of the debt security.
All payments by check will be made in "next-day" funds -- i.e., funds that
become available on the day after the check is cashed.
The prospectus supplement may contain special payment procedures for
certain securities.
HOW WE WILL MAKE PAYMENTS DUE IN OTHER CURRENCIES
We will follow the practice described in this subsection when paying
amounts that are payable in a specified currency other than U.S. dollars.
PAYMENTS ON GLOBAL NOTES. We will make payments on a global debt security
in accordance with the applicable policies of the depository as in effect from
time to time. We understand that these policies, as currently in effect at DTC,
are as follows.
Unless otherwise indicated in your prospectus supplement, if you are an
indirect holder of global debt securities denominated
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in a specified currency other than U.S. dollars and if you elect to receive
payments in a specified currency other than U.S. dollars, you must notify the
participant through which your interest in the global debt security is held of
your election:
o on or before the applicable regular record date, in the case of a payment
of interest; or
o on or before the 16th day prior to the stated maturity, or any redemption
or repayment date, in the case of payment of principal or any premium.
You may elect to receive all or only a portion of any interest, principal
or premium payment in a specified currency other than U.S. dollars.
Your participant must, in turn, notify DTC of your election on or before
the third DTC business day after that regular record date, in the case of a
payment of interest, and on or before the 12th business day prior to stated
maturity, or on the redemption or repayment date if your debt security is
redeemed or repaid earlier, in the case of a payment of principal or any
premium.
DTC, in turn, will notify the paying agent of your election in accordance
with DTC's procedures.
If complete instructions are received by the participant and forwarded by
the participant to DTC, and by DTC to us and the paying agent, on or before the
dates noted above, the paying agent, in accordance with DTC's instructions, will
make the payments to you or your participant by wire transfer of immediately
available funds to an account maintained by the payee with a bank located in the
country issuing the specified currency or in another jurisdiction outside the
United States acceptable to us and the paying agent.
Indirect holders of a global debt security denominated in a currency other
than U.S. dollars should consult their banks or brokers for information on how
to request payment in the specified currency.
PAYMENT WHEN OFFICES ARE CLOSED
If any payment is due on a debt security on a day that is not a business
day, we will make the payment on the next day that is a business day. Payments
postponed to the next business day in this situation will be treated under the
indentures as if they were made on the original due date. Postponement of this
kind will not result in a default under any debt security or indenture, and no
interest will accrue on the postponed amount from the original due date to the
next day that is a business day unless the applicable prospectus supplement
specifies otherwise.
PAYING AGENT
We will specify the paying agent for payments with respect to debt
securities of each series of debt securities in the applicable prospectus
supplement. Popular, Popular International Bank or Popular North America, as the
case may be, may at any time designate additional paying agents, rescind the
designation of any paying agent or approve a change in the office through which
any paying agent acts, except that we
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must maintain a paying agent in each place of payment for each series of debt
securities.
UNCLAIMED PAYMENTS
Regardless of who acts as paying agent, all money paid by us to a paying
agent that remains unclaimed at the end of two years after the amount is due to
a holder will be repaid to us. After that two-year period, the holder may look
only to us for payment and not to the trustee, any other paying agent or anyone
else.
TAXATION BY THE COMMONWEALTH OF PUERTO RICO
We will not withhold or deduct any present or future taxes, duties,
assessments or governmental charges that are imposed or levied by or on behalf
of Puerto Rico or by or with any district, municipality or other political
subdivision of Puerto Rico from payments to holders of the debt securities and
all payments made under the guarantees unless the law requires us to withhold or
deduct these taxes, duties, assessments or governmental charges.
In the event that law requires the issuer to deduct or withhold any amounts
in respect of taxes, duties, assessments or governmental charges, the issuer
will pay these additional amounts of principal, premium and interest (after
deduction of these taxes, duties, assessments or governmental charges) in the
payment to the holders of the debt securities, of the amounts which we would
otherwise have paid in respect to the debt securities in the absence of
deductions or withholding, which we refer to as "ADDITIONAL AMOUNTS", except
that we will not pay any additional amounts:
(i) to a holder of a debt security or an interest in or rights in a debt
security where deduction or withholding is required because the holder has some
connection with Puerto Rico or any political subdivision or taxing authority of
Puerto Rico or any political subdivision other than the mere holding of and
payment in respect of the debt security;
(ii) to a holder of a debt security when any deduction or withholding would
not have been required but for the holder's presentation for payment on a date
more than 30 days after maturity or the date on which payment is duly provided
for, whichever occurs later; or
(iii) to a holder when any deduction or withholding would not have been
required but for the holder's failure to comply with any certification,
identification or other reporting requirements concerning the nationality,
residence, identity or connection with Puerto Rico, or any political subdivision
or taxing authority of Puerto Rico if law requires compliance as a precondition
to exemption from deduction or withholding.
SPECIAL TERMS RELATING TO THE SUBORDINATED DEBT SECURITIES
Unless otherwise indicated in the applicable prospectus supplement, the
following provisions apply to the subordinated debt securities and Popular's
guarantees of the subordinated debt securities of Popular International Bank and
Popular North America.
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The right of a holder of subordinated debt securities to payment from any
distribution of an issuer's assets resulting from any dissolution, winding up,
liquidation, bankruptcy or reorganization of the issuer are subordinated to the
prior right to payment in full of all of that issuer's "SENIOR INDEBTEDNESS" (as
defined later in this section). The issuer's obligation to make payments on the
subordinated debt securities will not otherwise be affected. No payment on the
issuer's subordinated debt securities may be made during a default on any senior
indebtedness of the issuer. Because the subordinated debt securities are
subordinated in right of payment to any senior indebtedness of the issuer, in
the event of a distribution of assets upon insolvency, some of the issuer's
creditors may recover more, ratably, than holders of subordinated debt
securities of the issuer.
In addition, any amounts of cash, property or securities available after
satisfaction of the rights to payment of senior indebtedness will be applied
first to pay for the full payment of the issuer's "OTHER FINANCIAL OBLIGATIONS"
(as defined below) before any payment will be made to holders of the
subordinated debt securities. If the maturity of any subordinated debt
securities is accelerated, all senior indebtedness of the issuer would have to
be repaid before any payment could be made to holders of the issuer's
subordinated debt securities. Because of this subordination, if an issuer became
insolvent, its creditors who are not holders of senior indebtedness or
subordinated debt securities may recover ratably less than holders of its senior
indebtedness and may recover ratably more than holders of its subordinated debt
securities.
"SENIOR INDEBTEDNESS" of an issuer means an issuer's indebtedness for money
borrowed, except indebtedness that by its terms is not superior in right of
payments to the subordinated debt securities.
"OTHER FINANCIAL OBLIGATIONS" of an issuer are defined in the subordinated
indenture of that issuer to mean obligations of that issuer to make payment
pursuant to the terms of financial instruments, such as:
o securities contracts and foreign currency exchange contracts,
o derivative instruments or
o similar financial instruments.
Other financial obligations shall not include:
o obligations on account of an issuer's senior indebtedness and
o obligations on account of indebtedness for money borrowed ranking equally
in their priority of claim to payment with or subordinate to the claim of
subordinated debt securities.
As of June 30, 1999, Popular had $2.139 billion principal amount of senior
indebtedness and no other financial obligations, Popular International Bank had
$14.5 million principal amount of senior indebtedness and no other financial
obligations, and Popular North America had $1.286 billion principal amount of
senior indebtedness and $70 million of other financial obligations.
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POPULAR'S GUARANTEE
Popular will guarantee punctual payment on the Popular International Bank
and Popular North America senior debt securities, when and as payments are due
and payable. Popular's guarantee is absolute and unconditional, without regard
for any circumstance that might otherwise constitute a legal or equitable
discharge of a surety or guarantor. A guarantee executed by Popular will
evidence the guarantee and will appear on each Popular International Bank and
Popular North America senior debt security. Holders of the Popular International
Bank and Popular North America senior debt securities may proceed directly
against Popular in the event of default under the Popular International Bank and
Popular North America senior debt securities without first proceeding against
Popular International Bank or Popular North America. The guarantees will rank
equally in right of payment with all other unsecured and unsubordinated
obligations of Popular.
Popular will guarantee the punctual payment of rights of payment under the
Popular International Bank and Popular North America subordinated debt
securities on a subordinated basis and otherwise on the same terms as the
Popular International Bank and Popular North America senior debt securities.
DESCRIPTION OF PREFERRED STOCK
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This section summarizes the material terms that will apply generally to the
preferred stock we may issue under this prospectus, which is referred to as the
"PREFERRED STOCK".
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Each series of preferred stock will have financial and other terms specific
to it, and the specific terms of each preferred stock will be described in a
prospectus supplement attached to the front of this prospectus. Those terms may
vary from the terms described here. As you read this section, therefore, please
remember that the specific terms of your preferred stock as described in your
prospectus supplement will supplement and, if applicable, may modify or replace
the general terms described in this section. The statements we make in this
section may not apply to your preferred stock.
The description of the preferred stock that is set forth below and in any
prospectus supplement is not complete without reference to the documents that
govern each issuer's preferred stock, which include:
For Popular --
o Restated Certificate of Incorporation, as amended;
o Certificates of Designation describing Popular's 8.35% Non-Cumulative
Monthly Income Preferred Stock, 1994 Series A Preferred Stock and Series
A Participating Preferred Stock; and
o Certificate of Resolution relating to each series of Popular's preferred
stock to which this prospectus relates.
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For Popular International Bank and Popular North America --
o Certificate of Incorporation, as amended; and
o Certificate of Resolution relating to each series of preferred stock to
which this prospectus relates.
These documents will be filed as exhibits to the registration statement
relating to the preferred stock at or prior to the time of issuance of preferred
stock.
AUTHORITY TO ISSUE PREFERRED STOCK
The Articles of Incorporation of Popular authorizes its board of directors
to issue without the approval of the stockholders up to 10,000,000 shares of
authorized preferred stock with no par value. Popular has designated and issued
4,000,000 shares of Series A Preferred Stock, designated 350,000 shares of
Series A Participating Preferred Stock and has 5,650,000 shares of Preferred
Stock available to issue.
Popular International Bank's Certificate of Incorporation authorizes its
board of directors to issue 25,000,000 shares of preferred stock with a par
value of $25.00 per share. Popular North America's Certificate of Incorporation
authorizes its board of directors to issue 10,000,000 shares of preferred stock
with a par value of $.10 per share.
As of the date of this prospectus; Popular International Bank and Popular
North America had no shares of preferred stock outstanding; Popular owned all of
Popular International Bank's common stock; and Popular International Bank owned
all of Popular North America's common stock.
Each issuer's board of directors has the right to designate, for each
series of preferred stock:
o the title;
o dividend rates;
o special or relative rights in the event of a liquidation, distribution or
sale of assets or dissolution or winding up;
o provisions for a sinking fund;
o provisions for redemption or purchase;
o provisions for conversion;
o voting rights;
o the offering price or prices;
o whether the preferred stock will be in certificated or book-entry form;
o whether the preferred stock will be listed on a national securities
exchange; and
o any rights, preferences, privileges, limitations and restrictions which
are not inconsistent with the provisions of Popular's Restated
Certificate of Incorporation or Popular International Bank's or Popular
North America's Certificate of Incorporation.
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GENERAL TERMS OF THE PREFERRED STOCK
Banco Popular's Trust Division will be the transfer agent, dividend
disbursing agent and registrar for the preferred stock unless otherwise
specified in the prospectus supplement. The issuers are holding companies, so
their rights and the rights of holders of preferred stock to participate in the
distribution of assets of any of their subsidiaries upon their liquidation or
recapitalization separately or together will be subject to the prior claims of
the subsidiary's creditors and preferred stockholders, except to the extent the
issuers may be creditors with recognized claims against the subsidiary or
holders of preferred stock of the subsidiary.
The preferred stock will be fully paid and non-assessable when issued and
will provide holders with no rights to acquire securities, including preferred
stock, that may be issued after you purchase preferred stock. The shares of any
series of preferred stock may not trade at the liquidation preference for that
series. With regard to payment of dividends, except for the cumulation of
dividends, and rights on liquidation, dissolution or winding up of the issuer,
the preferred stock will rank senior to the equity securities of the issuer
expressly made junior to it and the issuers' common stock, equally with other
outstanding series of preferred stock expressly made equal to the preferred
stock and junior to all equity securities expressly made senior to the preferred
stock of the issuer. The term "equity securities" in a certificate of amendment
will not include debt securities convertible into or exchangeable for equity
securities.
DIVIDENDS AND DISTRIBUTIONS
At their discretion, the board of directors of each issuer may declare cash
dividends on the preferred stock payable out of funds legally available for that
purpose. The rate or formula to determine the rate used to calculate the
dividends is set forth in the prospectus supplement for each series of preferred
stock. The dividends may be cumulative or non-cumulative as provided in the
applicable prospectus supplement and will be payable to the holders of record on
the record dates fixed by the board of directors. The issuers' ability to pay
dividends is subject to policies of the Federal Reserve Board.
No dividends may be declared or paid or funds set apart for the payment of
dividends on any equity securities of an issuer with equal or lesser rights to
the payment of dividends unless dividends are paid or set apart for such payment
on the preferred stock of the issuer. If an issuer does not fully pay dividends
on its preferred stock, holders of the preferred stock of that issuer will share
dividends pro rata with equity securities of the issuer with equal rights to the
payment of dividends.
CONVERSION
The prospectus supplement for any series of preferred stock will state any
terms on which shares of that series are convertible into shares of another
series of preferred stock.
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We will reserve and keep available the full number of shares of the
additional preferred stock deliverable upon the conversion of all outstanding
shares of any convertible series of preferred stock. The issuer will keep these
reserved shares of preferred stock free from preemptive rights.
No fractional shares or scrip representing fractional shares of preferred
stock will be issued on the conversion of any convertible preferred stock. At
our election, each holder who would otherwise receive fractional shares will
instead be entitled to receive a cash payment equal to either the current market
price of the fractional interest or the proportionate interest in the net
proceeds from the sale of shares of preferred stock representing the aggregate
of such fractional shares.
EXCHANGE
If so determined by the board of directors of an issuer, the holders of
preferred stock of any series may be obligated to exchange their shares for
other preferred stock or debt securities. The terms of any exchange and any
replacement preferred stock or debt securities will be described in the
applicable prospectus supplement.
REDEMPTION
We may issue a series of preferred stock of which we can redeem all or part
at any time upon terms and at the redemption prices set forth in the applicable
prospectus supplement.
If any issuer redeems part of a series of preferred stock, that issuer will
determine which shares to redeem by lot or pro rata or by any other method
determined to be equitable by each issuer's board of directors.
Unless we fail to pay the redemption price, dividends will cease to accrue
on preferred stock called for redemption on or after a redemption date, and the
holders' rights will terminate, except for the right to receive the redemption
price.
Under current regulations, bank holding companies may not exercise any
option to redeem shares of preferred stock included as Tier 1 capital, or
exchange such preferred stock for debt securities, without the prior approval of
the Federal Reserve Board. Ordinarily, the Federal Reserve Board would not
permit such a redemption unless
o the shares are redeemed with the proceeds of a sale by the bank holding
company of common stock or perpetual preferred stock; or
o the Federal Reserve Board determines that the bank holding company's
condition and circumstances warrant the reduction of a source of
permanent capital.
PREFERENCES IN LIQUIDATION
In the event of any voluntary or involuntary liquidation, dissolution or
winding up of an issuer, the holders of preferred stock of that issuer will have
preference and priority over any class of equity securities that ranks junior to
their preferred stock upon liquidation, dissolution or winding up. This priority
will extend to payments in the amount set forth in the
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applicable prospectus supplement plus all accrued and unpaid dividends to the
date of final distribution to the holders. These payments may be made from
capital or surplus using the assets of the relevant issuer or proceeds from any
liquidation. If these assets or proceeds are insufficient to satisfy fully all
claims with an equal priority of payment, then the assets and proceeds will be
distributed ratably among the holders of preferred stock of that issuer. If you
own noncumulative preferred stock, you will not be entitled to receive payment
for unpaid dividends from prior dividend periods. After you are paid the full
amount of the liquidation preference to which you are entitled, you will not be
entitled to participate in any further distribution of assets of the issuer of
your preferred stock.
VOTING RIGHTS
The term "BANKING LAW" refers to a Puerto Rico law and the term "OFFICE OF
THE COMMISSIONER" refers to the Puerto Rico Office of Financial Institutions, a
regulator. The definitions of these terms are incorporated in this subsection by
reference to the Report on Form 10-K of Popular for the year ended December 31,
1998.
Except as indicated in the applicable prospectus supplement or as expressly
required by applicable law, you will have no voting rights.
Under regulations adopted by the Federal Reserve Board, any series of
preferred stock whose holders become entitled to vote for the election of
directors may be deemed a "class of voting securities". A holder of 25% or more
of such series (or a holder of 5% if it otherwise exercises a "controlling
influence" over the relevant issuer) may then be subject to regulation as a bank
holding company in accordance with the Bank Holding Company Act. In addition,
when a series is deemed a class of voting securities,
o any other bank holding company may be required to obtain the approval of
the Federal Reserve Board to acquire or retain 5% or more of that series,
and
o any person other than a bank holding company may be required to file with
the Federal Reserve Board under the Change in Bank Control Act to acquire
or retain 10% or more of that series.
Section 12 of the Banking Law requires prior approval of the Office of the
Commissioner to obtain control of any bank organized under the Banking Law. The
Banking Law requires that both parties involved in a transfer of voting and
outstanding capital stock of any bank organized under the laws of Puerto Rico to
any person or entity that will become directly or indirectly the owner after the
transfer of more than 5% of the voting and outstanding capital stock of that
bank shall inform the Office of the Commissioner of the proposed transfer at
least 60 days prior to the date the transfer is to be effected. The Banking Law
does not contain any provision allowing for the extension of such 60-day time
period. The transfer requires the approval of the Office of the Commissioner if
it results in a change of control of the bank. For the purposes of Section 12 of
the Banking Law, the term "control" means the
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power to, directly or indirectly, direct or influence decisively the
administration or the normal operation of the bank. The Department of the
Treasury (predecessor to the Office of the Commissioner) made a determination
that the foregoing provisions of the Banking Law are applicable to a change in
control of Popular in a letter dated April 9, 1985.
Pursuant to Section 12(d) of the Banking Law, as soon as the Office of the
Commissioner receives notice of a proposed transaction that may result in the
control or in a change of control of a bank, the Office of the Commissioner
shall have the duty to make the necessary investigations. The Office of the
Commissioner shall issue authorization for the transfer of control of the bank
if the results of his investigations are in his judgment satisfactory. The
decision of the Office of the Commissioner is final and unreviewable.
POPULAR'S GUARANTEE
Popular will fully and unconditionally guarantee the punctual payment of:
o any accrued and unpaid dividends, whether or not declared, on any series
of Popular International Bank and Popular North America preferred stock;
o the redemption price for any shares of Popular International Bank and
Popular North America preferred stock called or redeemed at the option of
Popular International Bank and Popular North America or the holder;
o the liquidation preference of Popular International Bank and Popular
North America preferred stock; and
o any additional amounts with respect to a series of Popular International
Bank and Popular North America preferred stock.
The guarantee of the Popular International Bank and Popular North America
preferred stock shall constitute an unsecured obligation of Popular and will
rank junior to all of its liabilities. The guarantee will rank senior to
Popular's common stock. The guarantee's rank relative to the preferred stock of
Popular will be specified in the applicable prospectus supplement.
VALIDITY OF OFFERED SECURITIES
Brunilda Santos de Alvarez, counsel to Popular, will pass upon the validity
of the preferred stock of Popular and Popular International Bank for Popular and
Popular International Bank. The validity of the senior debt securities and
subordinated debt securities of Popular and Popular International Bank and the
guarantees of those securities will be passed upon for Popular and Popular
International Bank by Ms. Alvarez as to matters of the laws of the Commonwealth
of Puerto Rico and by Sullivan & Cromwell as to matters of New York law.
Sullivan & Cromwell will pass
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upon the validity of the securities of Popular North America and the guarantees
of those securities. The validity of the securities will be passed upon for any
underwriters or agents by counsel named in the prospectus supplement.
EXPERTS
The financial statements included in Popular's Annual Report on Form 10-K
for the year ended December 31, 1998 and incorporated in this prospectus by
reference have been so incorporated in reliance on the report of
PricewaterhouseCoopers LLP, independent accountants, given on the authority of
said firm as experts in auditing and accounting.
PLAN OF DISTRIBUTION
We may sell securities:
o to or through underwriting syndicates represented by managing
underwriters;
o through one or more underwriters without a syndicate for them to sell to
the public; and
o to investors directly or through agents.
Any underwriter or agent involved in the sale of any series of the
securities will be named in the applicable prospectus supplement.
The prospectus supplement for each series of securities will describe:
o the terms of the offering of these securities, including the name of the
agent or the name or names of any underwriters;
o the public offering or purchase price;
o any discounts and commissions to be allowed or paid to the agent or
underwriters and all other items constituting underwriting compensation;
o any discounts and commissions to be allowed or paid to dealers; and
o any exchanges on which the securities will be listed.
Only the agents or underwriters named in a prospectus supplement are agents
or underwriters in connection with the securities being offered by that
prospectus supplement. Under certain circumstances, we may repurchase securities
and reoffer them to the public as set forth above and arrange for repurchases
and resales of the securities by dealers.
We may agree to indemnify the agents and the several underwriters against
certain civil liabilities, including liabilities under the Securities Act or
contribute to payments the agents or the underwriters may be required to make.
All securities will be a new issue of
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securities with no established trading market. Any underwriters to whom
securities are sold by us for public offering and sale may make a market in such
securities, but they will not be obligated to do so and may discontinue any
market making at any time without notice. No one associated with any offering of
securities can assure the liquidity of the trading market for any securities.
The underwriters and their associates may be customers of, lenders to,
engage in transactions with, and perform services for, Popular or its
subsidiaries in the ordinary course of business.
Popular Securities, Inc. may participate as an agent or an underwriter in
offerings of Securities. Popular Securities is a wholly owned subsidiary of
Popular and a member of the NASD. Because of the relationship between Popular
Securities and Popular, Popular North America and Popular International Bank,
offerings of Securities in which Popular Securities participates will be
conducted in accordance with NASD Rule 2720.
WHERE YOU CAN FIND MORE INFORMATION
We file reports, proxy statements and other information with the SEC. Our
SEC filings are also available over the Internet at the SEC's web site at
http://www.sec.gov or at our web site at http://www.popularinc. com. You may
also read and copy any document we file by visiting the SEC's public reference
rooms in Washington, D.C., New York, New York, and Chicago, Illinois. Please
call the SEC at 1-800-SEC-0330 for further information about the public
reference rooms. We filed a registration statement on Form S-3 with the SEC
relating to the Securities. This prospectus is a part of the registration
statement and does not contain all of the information in the registration
statement. Whenever a reference is made in this prospectus to a contract or
other document, please be aware that the reference is not necessarily complete
and that you should refer to the exhibits that are part of the registration
statement for a copy of the contract or other document.
INCORPORATION OF INFORMATION WE FILE WITH THE SEC
The SEC allows us to incorporate by reference the information we file with
them, which means:
o incorporated documents are considered part of the prospectus;
o we can disclose important information to you by referring you to those
documents; and
o information that we file with the SEC will automatically update and
supersede this incorporated information.
We incorporate by reference the documents listed below which were filed
with the SEC under the Securities Exchange Act:
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1. The Annual Report on Form 10-K for the year ended December 31, 1998,
provided, however, that the information referred to in Item 402(a)(8) of
Regulation S-K promulgated by the Commission shall not be deemed to be
specifically incorporated by reference herein.
2. Quarterly Reports on Form 10-Q for the quarter ended March 31, 1999.
3. Current Reports on Form 8-K, dated January 11, 1999, April 9, 1999 and
July 8, 1999.
4. Registration Statement on Form 8-A, dated August 28, 1998, filed pursuant
to Section 12(g) of the Exchange Act, by which Popular registered its Series
A Participating Cumulative Preferred Stock Purchase Rights.
5. Registration Statement on Form 8-A, dated June 17, 1994, as amended by
Popular's Amendment on Form 8-A/A, dated June 21, 1994, filed pursuant to
Section 12(g) of the Exchange Act, by which Popular registered its 8.35%
Non-Cumulative Monthly Income Preferred Stock, 1994 Series A.
We also incorporate by reference each of the following documents that we
will file with the SEC after the date of this prospectus until this offering is
completed or after the date of this initial registration statement and prior to
effectiveness of the registration statement:
o reports filed under Sections 13(a) and (c) of the Exchange Act;
o definitive proxy or information statements filed under Section 14 of the
Exchange Act in connection with any subsequent stockholders' meeting; and
o any reports filed under Section 15(d) of the Exchange Act. You should
rely only on information contained or incorporated by reference in this
prospectus. We have not, and the agents and dealers have not, authorized
any other person to provide you with different information. If anyone
provides you with different or inconsistent information, you should not
rely on it. We are not, and the agents and dealers are not, making an
offer to sell these securities in any jurisdiction where the offer or
sale is not permitted.
You should assume that the information appearing in this prospectus is
accurate as of the date of this prospectus only. Our business, financial
condition and results of operations may have changed since that date.
You may request a copy of any filings referred to above (excluding
exhibits), at no cost, by contacting us at the following address: Amilcar
Jordan, Senior Vice President, Popular, Inc., P.O. Box 362708, San Juan, Puerto
Rico 00936-2708. Telephone requests may be directed to (787) 765-9800. You may
also access this information at our website at http://www.popularinc.com.
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======================================================
NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO REPRESENT ANYTHING NOT CONTAINED IN THIS PROSPECTUS. YOU MUST
NOT RELY ON ANY UNAUTHORIZED INFORMATION OR REPRESENTATIONS. THIS PROSPECTUS IS
AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES IT
DESCRIBES, BUT ONLY UNDER CIRCUMSTANCES AND IN JURISDICTIONS WHERE IT IS LAWFUL
TO DO SO. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CURRENT ONLY AS OF ITS
DATE.
------------------------------
TABLE OF CONTENTS
Prospectus
Popular, Inc. ........................................o
Popular International Bank, Inc.......................o
Popular North America, Inc............................o
Consolidated Ratio of Earnings to Fixed Charges of
Popular...............................................o
Holding Company Structure.............................o
Use of Proceeds.......................................o
Legal Ownership of Securities.........................o
Description of Debt Securities We May Offer...........o
Description of Preferred Stock........................o
Validity of Offered Securities........................o
Experts...............................................o
Plan of Distribution..................................o
Where You Can Find More Information...................o
Incorporation of Information We File with the SEC.....o
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses in connection with the issuance and distribution of
the securities being registered are:
Registration Fee.................................................... $417,000
Fees and Expenses of Accountants.................................... 30,000
Fees and Expenses of Counsel........................................ 150,000
Blue Sky Fees and Expenses.......................................... 25,000
Printing and Engraving Expenses..................................... 25,000
Rating Agency Fees.................................................. 398,000
Trustee's Fees...................................................... 12,000
Miscellaneous....................................................... 25,000
------
Total $1,082,000
=========
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) Popular and Popular International Bank are Puerto Rico corporations.
(i) Article ELEVENTH of the Restated Certificate of Incorporation of
Popular provides the following:
(1) Popular shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of Popular) by
reason of the fact that he is or was a director, officer, employee or agent
of Popular, or is or was serving at the written request of Popular as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of Popular, and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. The termination of any action, suit or
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proceeding by judgment, order, settlement, conviction, or upon a plea of
nolo contendere or its equivalent, shall not, of itself, create a
presumption that the person did not act in good faith and in a manner which
he reasonably believed to be in or not opposed to the best interests of
Popular and, with respect to any criminal action or proceeding, had
reasonable cause to believe that his conduct was unlawful.
(2) Popular shall indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed
action or suit by or in the right of Popular to procure a judgment in its
favor by reason of the fact that he is or was a director, officer, employee
or agent of Popular, or is or was serving at the written request of Popular
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, against expenses
(including attorney's fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of Popular, except that no indemnification
shall be made in respect of any claim, issue or matter as to which such
person shall have been adjudged to be liable for negligence or misconduct
in the performance of his duty to Popular unless and only to the extent
that the court in which such action or suit was brought shall determine
upon application that, despite the adjudication of liability but in view of
all the circumstances of the case, such person is fairly and reasonably
entitled to indemnity for such expenses which such court shall deem proper.
(3) To the extent that a director, officer, employee or agent of
Popular has been successful on the merits or otherwise in defense of any
action, suit or proceeding referred to in paragraph 1 or 2 of this Article
ELEVENTH, or in defense of any claim, issue or matter therein, he shall be
indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him in connection therewith.
(4) Any indemnification under paragraph 1 or 2 of this Article
ELEVENTH (unless ordered by a court) shall be made by Popular only as
authorized in the specific case upon a determination that indemnification
of the director, officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set forth therein.
Such determination shall be made (a) by the Board of Directors by a
majority vote of a quorum consisting of directors who were not parties to
such action, suit or proceeding, or (b) if such a quorum is not obtainable,
or, even if obtainable, a quorum of disinterested directors so directs, by
independent legal counsel in a written opinion, or (c) by the stockholders.
(5) Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by Popular in advance of the final disposition of
such action, suit or proceeding as authorized by the Board of Directors in
the specific case upon receipt of an undertaking by or on behalf of the
director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by Popular
as authorized in this Article ELEVENTH.
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(6) The indemnification provided by this Article ELEVENTH shall not be
deemed exclusive of any other rights to which those seeking indemnification
may be entitled under any statute, by-law, agreement, vote of stockholders
or disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office,
and shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors
and administrators of such a person.
(7) By action of its Board of Directors, notwithstanding any interest
of the directors in the action, Popular may purchase and maintain
insurance, in such amounts as the Board of Directors deems appropriate, on
behalf of any person who is or was a director, officer, employee or agent
of Popular, or is or was serving at the written request of Popular as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against any liability asserted
against him and incurred by him in any such capacity, or arising out of his
status as such, whether or not Popular would have the power or would be
required to indemnify him against such liability under the provisions of
this Article ELEVENTH or of the General Corporation Law of the Commonwealth
of Puerto Rico or of any other state of the United States or foreign
country as may be applicable.
(ii) Article ELEVENTH of the Certificate of Incorporation of Popular
International Bank provides the following:
(1) Popular International Bank shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of
Popular International Bank) by reason of the fact that he is or was a
director, officer, employee or agent of Popular International Bank, or is
or was serving at the written request of Popular International Bank as a
director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually
and reasonably incurred by him in connection with such action, suit or
proceeding if he acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of Popular International
Bank, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of
any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of Popular International Bank and, with respect to any criminal
action or proceeding, had reasonable cause to believe that his conduct was
unlawful.
(2) Popular International Bank shall indemnify any person who was or
is a party or is threatened to be made a party to any threatened, pending
or completed action or suit by or in the right of Popular International
Bank to procure a judgment in its favor by reason of the
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fact that he is or was a director, officer, employee or agent of Popular
International Bank, or is or was serving at the written request of Popular
International Bank as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise, against
expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of Popular International Bank, except
that no indemnification shall be made in respect of any claim, issue or
matter as to which such person shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to Popular
International Bank unless and only to the extent that the court in which
such action or suit was brought shall determine upon application that,
despite the adjudication of liability but in view of all the circumstances
of the case, such person is fairly and reasonably entitled to indemnity for
such expenses which such court shall deem proper.
(3) To the extent that a director, officer, employee or agent of
Popular International Bank has been successful on the merits or otherwise
in defense of any action, suit or proceeding referred to in paragraph 1 or
2 of this Article ELEVENTH, or in defense of any claim, issue or matter
therein, he shall be indemnified against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection therewith.
(4) Any indemnification under paragraph 1 or 2 of this Article
ELEVENTH (unless ordered by a court) shall be made by Popular International
Bank only as authorized in the specific case upon a determination that
indemnification of the director, officer, employee or agent is proper in
the circumstances because he has met the applicable standard of conduct set
forth therein. Such determination shall be made (a) by the Board of
Directors by a majority vote of a quorum consisting of directors who were
not parties to such action, suit or proceeding, or (b) if such a quorum is
not obtainable, or, even if obtainable, a quorum of disinterested directors
so directs, by independent legal counsel in a written opinion, or (c) by
the stockholders.
(5) Expenses incurred in defending a civil or criminal action, suit or
proceeding may be paid by Popular International Bank in advance of the
final disposition of such action, suit or proceeding as authorized by the
Board of Directors in the specific case upon receipt of an undertaking by
or on behalf of the director, officer, employee or agent to repay such
amount unless it shall ultimately be determined that he is entitled to be
indemnified by Popular International Bank as authorized in this Article
ELEVENTH.
(6) The indemnification provided by this Article ELEVENTH shall not be
deemed exclusive of any other rights to which those seeking indemnification
may be entitled under any statute, by-law, agreement, vote of stockholders
or disinterested directors or otherwise, both as to action in his official
capacity and as to action in another capacity while holding such office,
and shall continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs, executors
and administrators of
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such a person.
(7) By action of its Board of Directors, notwithstanding any interest
of the directors in the action, Popular International Bank may purchase and
maintain insurance, in such amounts as the Board of Directors deems
appropriate, on behalf of any person who is or was a director, officer,
employee or agent of Popular International Bank, or is or was serving at
the written request of Popular International Bank as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise, against any liability asserted against him and
incurred by him in any such capacity, or arising out of his status as such,
whether or not Popular International Bank would have the power or would be
required to indemnify him against such liability under the provisions of
this Article ELEVENTH or of the General Corporation Law of the Commonwealth
of Puerto Rico or of any other state of the United States or foreign
country as may be applicable.
(b) Popular North America is a Delaware corporation.
(i) Section 102 of the Delaware General Corporation Law allows a
corporation to eliminate the personal liability of a director to Popular or
its stockholders for monetary damages for breach of fiduciary duty as a
director, except in cases where the director breached his duty of loyalty,
failed to act in good faith, engaged in intentional misconduct or knowing
violation of law, authorized the unlawful payment of a dividend or approved
an unlawful stock repurchase or obtained an improper personal benefit.
Section 145 of the Delaware General Corporation Law, as amended, provides
that a corporation may indemnify any person who was or is a party or is
threatened to be a party to any threatened, pending or completed action,
suit, or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that he is or was a director, officer,
employee or agent of Popular or is or was serving at its request in such
capacity in another corporation or business association against expenses
(including attorneys' fees), judgments, fines and amounts paid in
settlement, actually and reasonably incurred by him in connection with such
action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of
Popular and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful.
(ii) Section 6.4 of the By-laws of Popular North America provides the
following:
Section 6.4. Indemnification of Directors, Officers and
Employees. Popular shall indemnify to the full extent permitted by law
any person made or threatened to be made a party to any action, suit
or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that such person or such person's
testator or intestate is or was a director, officer or employee of
Popular or serves or served at the request of Popular any other
enterprise as a director, officer or employee. Expenses, including
attorneys' fees, incurred by any such person in defending any such
action, suit or proceeding shall be paid or reimbursed by Popular
promptly upon receipt by it of an undertaking of such person to repay
such expenses if it shall ultimately be determined that such person is
not entitled to be
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indemnified by Popular. The rights provided to any person by this
by-law shall be enforceable against Popular by such person who shall
be presumed to have relied upon it in serving or continuing to serve
as a director, officer or employee as provided above. No amendment of
this by-law shall impair the rights of any person arising at any time
with respect to events occurring prior to such amendment. For purposes
of this by-law, the term "Corporation" shall include any predecessor
of Popular and any constituent corporation (including any constituent
of a constituent) absorbed by Popular in a consolidation or merger;
the term "other enterprise" shall include any corporation,
partnership, joint venture, trust or employee benefit plan; service
"at the request of Popular" shall include service as a director,
officer or employee of Popular which imposes duties on, or involves
services by, such director, officer or employee with respect to an
employee benefit plan, its participants or beneficiaries; any excise
taxes assessed on a person with respect to an employee benefit plan
shall be deemed to be indemnifiable expenses; and action by a person
with respect to an employee benefit plan which such person reasonably
believes to be in the interest of the participants and beneficiaries
of such plan shall be deemed to be action not opposed to the best
interests of Popular.
(c) Popular, Popular International Bank and Popular North America
maintain directors' and officers' liability insurance policies.
(d) Reference is made to the indemnity provisions in the Underwriting
Agreement, which is incorporated by reference as Exhibit 1 to this
Registration Statement from Registration Statement No. 33-57038.
ITEM 16. EXHIBITS
(1)(a) -- Form of Underwriting Agreement. (Incorporated by reference
from Registration Statement No. 33-57038)
(4)(a) -- Restated Articles of Incorporation of Popular, Inc., as
amended (English translation). (Incorporated by reference
from Registration Statement No. 33-26941)
(4)(b) -- Certificate of Incorporation of Popular International Bank,
Inc. (English translation). (Incorporated by reference from
Registration Statement No. 33-54299)
(4)(c) -- Amended and Restated Certificate of Incorporation of Popular
North America, Inc., as amended. (Incorporated by reference
from Registration Statement No. 33-26941)
(4)(d) -- Copy of Senior Indenture of Popular, Inc., dated as of
February 15, 1995, as supplemented by the First Supplemental
Indenture thereto, dated as of May 8, 1997, each between
Popular, Inc. and The First National Bank of Chicago, as
trustee. (Incorporated by reference from Registration
Statement No. 33-26941)
(4)(e) -- Copy of Subordinated Indenture of Popular, Inc., dated as of
November 30,
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1995, between Popular, Inc. and The First National Bank of
Chicago, as trustee. (Incorporated by reference from
Registration Statement No. 33-26941)
(4)(f) -- Copy of Senior Indenture of Popular North America, Inc.,
dated as of October 1, 1991, as supplemented by the First
Supplemental Indenture thereto, dated as of February 28,
1995, and by the Second Supplemental Indenture thereto, dated
as of May 8, 1997, each among Popular North America, Inc.,
Popular, Inc., as Guarantor, and The First National Bank of
Chicago, as trustee. (Incorporated by reference from
Registration Statement No. 33-26941)
(4)(g) -- Form of Subordinated Indenture of Popular North America, Inc.
(Incorporated by reference from Registration Statement No.
33-61601)
(4)(h) -- Form of Senior Indenture of Popular International Bank, Inc.
(Incorporated by reference from Registration Statement No.
33-26941)
(4)(i) -- Form of Subordinated Indenture of Popular International Bank,
Inc. (Incorporated by reference from Registration Statement
No. 33-26941)
(4)(i) -- Form of Subordinated Indenture of Popular International Bank,
Inc. (Incorporated by reference from Registration Statement
No. 33-57038)
(4)(j) -- Rights Agreement, dated as of August 28, 1998, between
Popular, Inc. and Banco Popular de Puerto Rico, as Rights
Agent. (Incorporated by reference from Registration
Statement No. 34-13818)
(4)(k) -- Form of Certificate of 8.35% non-cumulative monthly Preferred
Stock, 1994 Series A (Liquidation Preference $25.00 per
share). (Incorporated by reference to Exhibit 4.7 of 1994
Form 10-K)
(5)(a) -- Opinion of Brunilda Santos de Alvarez, Esq.
(5)(b) -- Opinion of Sullivan & Cromwell. (12) -- Computation of
Consolidated Ratios of Earnings to Fixed Charges and Earnings
to Fixed Charges and Preferred Stock Dividends
(23)(a) -- Consent of Independent Accountants.
(23)(b) -- Consent of Brunilda Santos de Alvarez, Esq. (included in
Exhibit (5)(a))
(23)(c) -- Consent of Sullivan & Cromwell. (included in Exhibit (5)(b))
(24) -- Powers of attorney (included on pages II-7 through II-11).
(25)(a) -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The First National Bank of Chicago, as Trustee
under indenture of Popular, Inc.
(25)(b) -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The First National Bank of Chicago, as Trustee
under indenture of Popular International Bank, Inc.
(25)(c) -- Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939 of The First National Bank of Chicago, as Trustee
under indenture of Popular North America Inc.
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ITEM 17. UNDERTAKINGS
The undersigned registrants hereby undertake:
(a)(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in
the aggregate, the changes in volume and price represent no more than
20 percent change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
registration statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrants pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are incorporated
by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
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(b) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of Popular's annual report pursuant to
section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this Registration Statement shall be deemed to
be a new registration statement relating to the securities offered therein
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) That, for purposes of determining any liability under the
Securities Act of 1933, the information omitted from the form of prospectus
filed as part of this Registration Statement in reliance upon Rule 430A and
contained in a form of prospectus filed by any registrant pursuant to Rule
424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be
part of this Registration Statement as of the time it was declared
effective.
(d) That, for purposes of determining any liability under the
Securities Act of 1933, each post-effective amendment that contains a form
of prospectus shall be deemed to be a new Registration Statement relating
to the securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering thereof.
The undersigned Registrants hereby undertake to file an application for the
purpose of determining the eligibility of the Trustee under any Indenture to act
under Subsection (a) of Section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of such Act.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrants pursuant to the provisions referred to in Item 15 of this
Registration Statement, or otherwise, the Registrants have been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification by the
Registrants against such liabilities (other than the payment by the Registrants
of expenses incurred or paid by a director, officer or controlling person of the
Registrants in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the Registrants will, unless in the opinion of
their counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
them is against public policy as expressed in the Act and will be governed by
the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
co-registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of San Juan, Commonwealth of Puerto Rico, on the
8th day of July, 1999.
POPULAR, INC.
(Registrant)
By /s/ JORGE A. JUNQUERA
------------------------------------
Jorge A. Junquera
Senior Executive Vice President and
Director
(Principal Financial Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of POPULAR, INC. (the "Corporation") hereby constitutes and
appoints Richard L. Carrion, David H. Chafey, Jr., Jorge A. Junquera, Richard
Barrios, Amilcar Jordan and Roberto R. Herencia, and each of them singly, the
true and lawful agents and attorneys-in-fact of the undersigned with full power
of substitution and resubstitution and with full power and authority in said
agents and attorneys-in-fact, and in any one of them, to sign for each of the
undersigned and in his name, place or stead in any and all capacities indicated
below, a Registration Statement on Form S-3 to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, relating to
the registration of up to $1,500,000,000 aggregate initial offering price of
debt, securities, preferred stock and guarantees, and to sign any and all
pre-effective amendments or post-effective amendments to such Registration
Statement and to file the same, with all exhibits thereto and other documents in
connection therewith with the Securities and Exchange Commission, granting unto
said agents and attorneys-in-fact, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said agents and
attorneys-in-fact or any of them, or their or his substitutes or substitute, may
lawfully do or cause to be done by virtue thereof.
II-10
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ RICHARD L. CARRION Chairman, President and Chief Executive July 8, 1999
- -------------------------------------------------- Officer (Principal Executive Officer)
Richard L. Carrion
/s/ ALFONSO F. BALLESTER Director July 8, 1999
- --------------------------------------------------
Alfonso F. Ballester
/s/ JUAN J. BERMUDEZ Director July 8, 1999
- --------------------------------------------------
Juan J. Bermudez
/s/ FRANCISCO J. CARRERAS Director July 8, 1999
- --------------------------------------------------
Francisco J. Carreras
/s/ DAVID H. CHAFEY, JR. Senior Executive Vice President and July 8, 1999
- -------------------------------------------------- Director
David H. Chafey, Jr.
Director July 8, 1999
- --------------------------------------------------
Luis E. Dubon, Jr.
/s/ ANTONIO LUIS FERRE Director July 8, 1999
- --------------------------------------------------
Antonio Luis Ferre
/s/ HECTOR R. GONZALEZ Director July 8, 1999
- --------------------------------------------------
Hector R. Gonzalez
/s/ JORGE A. JUNQUERA Senior Executive Vice President and July 8, 1999
- -------------------------------------------------- Director (Principal Financial Officer)
Jorge A. Junquera
/s/ MANUEL MORALES, JR. Director July 8, 1999
- --------------------------------------------------
Manuel Morales, Jr.
/s/ ALBERTO M. PARACCHINI Director July 8, 1999
- --------------------------------------------------
Alberto M. Paracchini
/s/ FRANCISCO M. REXACH, JR. Director July 8, 1999
- --------------------------------------------------
Francisco M. Rexach, Jr.
/s/ FELIX J. SERRALLES NEVARES Director July 8, 1999
- --------------------------------------------------
Felix J. Serralles Nevares
/s/ JULIO E. VIZCARRONDO, JR. Director July 8, 1999
- --------------------------------------------------
Julio E. Vizcarrondo, Jr.
/s/ AMILCAR JORDAN Senior Vice President (Principal July 8, 1999
- -------------------------------------------------- Accounting Officer)
Amilcar Jordan
</TABLE>
II-11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the undersigned
co-registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of San Juan, Commonwealth of Puerto Rico, on the
8th day of July, 1999.
POPULAR INTERNATIONAL BANK, INC.
(Registrant)
By /s/ JORGE A. JUNQUERA
------------------------------
Jorge A. Junquera
Chairman of the Board
(Principal Executive Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of POPULAR INTERNATIONAL BANK, INC. (the "Corporation") hereby
constitutes and appoints Richard L. Carrion, Jorge A. Junquera, Richard Barrios,
Amilcar Jordan, and Roberto R. Herencia, and each of them singly, the true and
lawful agents and attorneys-in-fact of the undersigned with full power of
substitution and resubstitution and with full power and authority in said agents
and attorneys-in-fact, and in any one of them, to sign for each of the
undersigned and in his name, place or stead in any and all capacities indicated
below, a Registration Statement on Form S-3 to be filed with the Securities and
Exchange Commission under the Securities Act of 1933, as amended, relating to
the registration of up to $1,500,000,000 aggregate initial offering price of
debt, securities, preferred stock and guarantees, and to sign any and all
pre-effective amendments or post-effective amendments to such Registration
Statement and to file the same, with all exhibits thereto and other documents in
connection therewith with the Securities and Exchange Commission, granting unto
said agents and attorneys-in-fact, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said agents and
attorneys-in-fact or any of them, or their or his substitutes or substitute, may
lawfully do or cause to be done by virtue thereof.
II-12
<PAGE>
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ RICHARD L. CARRION Chairman of the Board July 8, 1999
- --------------------------------- (Principal Executive Officer)
Richard L. Carrion
/s/ ALFONSO F. BALLESTER Director July 8, 1999
- ---------------------------------
Alfonso F. Ballester
/s/ JORGE A. JUNQUERA President and Director July 8, 1999
- ---------------------------------
Jorge A. Junquera
Director July 8, 1999
- ---------------------------------
Roberto R. Herencia
/s/ FRANCISCO REXACH, JR. Director July 8, 1999
- ---------------------------------
Francisco Rexach, Jr.
/s/ FELIX J. SERALLES Director July 8, 1999
- ---------------------------------
Felix J. Seralles
Director July 8, 1999
- ---------------------------------
Richard Speer
/s/ JULIO E. VIZCARRONDO Director July 8, 1999
- ---------------------------------
Julio E. Vizcarrondo
/s/ AMILCAR JORDAN Senior Vice President July 8, 1999
- --------------------------------- (Principal Accounting Officer)
Amilcar Jordan
</TABLE>
II-13
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
co-registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned thereunto
duly authorized, in the City of San Juan, Commonwealth of Puerto Rico, on the
8th day of July, 1999.
POPULAR NORTH AMERICA, INC.
(Registrant)
By /s/ JORGE A. JUNQUERA
----------------------------
Jorge A. Junquera
President and Director
(Principal Financial Officer)
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned directors
and/or officers of POPULAR NORTH AMERICA, INC. (the "Corporation") hereby
constitutes and appoints Richard L. Carrion, David H. Chafey, Jorge A. Junquera,
Richard Barrios, Amilcar Jordan and Roberto R. Herencia, and each of them
singly, the true and lawful agents and attorneys-in-fact of the undersigned with
full power of substitution and resubstitution and with full power and authority
in said agents and attorneys-in-fact, and in any one of them, to sign for each
of the undersigned and in his name, place or stead in any and all capacities
indicated below, a Registration Statement on Form S-3 to be filed with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
relating to the registration of up to $1,500,000,000 aggregate initial offering
price of debt, securities, preferred stock and guarantees, and to sign any and
all pre-effective amendments or post-effective amendments to such Registration
Statement and to file the same, with all exhibits thereto and other documents in
connection therewith with the Securities and Exchange Commission, granting unto
said agents and attorneys-in-fact, and each of them, full power and authority to
do and perform each and every act and thing requisite or necessary to be done in
and about the premises, as fully to all intents and purposes as he might or
could do in person, hereby ratifying and confirming all that said agents and
attorneys-in-fact or any of them, or their or his substitutes or substitute, may
lawfully do or cause to be done by virtue thereof.
II-14
<PAGE>
<TABLE>
<CAPTION>
Signatures Title Date
---------- ----- ----
<S> <C> <C>
/s/ RICHARD L. CARRION Chairman of the Board July 8, 1999
- -------------------------------------------------- (Principal Executive Officer)
Richard L. Carrion
/s/ ALFONSO F. BALLESTER Director July 8, 1999
- --------------------------------------------------
Alfonso F. Ballester
/s/ JORGE A. JUNQUERA President and Director (Principal Financial July 8, 1999
- -------------------------------------------------- Officer)
Jorge A. Junquera
Senior Vice President and Director July 8, 1999
- --------------------------------------------------
Roberto R. Herencia
/s/ FRANCISCO REXACH, JR. Director July 8, 1999
- --------------------------------------------------
Francisco Rexach, Jr.
/s/ FELIX J. SERALLES Director July 8, 1999
- --------------------------------------------------
Felix J. Seralles
Director July 8, 1999
- --------------------------------------------------
Richard Speer
/s/ JULIO E. VIZCARRONDO Director July 8, 1999
- --------------------------------------------------
Julio E. Vizcarrondo
/s/ AMILCAR JORDAN Senior Vice President July 8, 1999
- -------------------------------------------------- Principal Accounting Officer)
Amilcar Jordan
</TABLE>
II-15
<PAGE>
EXHIBIT INDEX
Exhibit Sequentially
Number Description Numbered Page
- ------ ----------- -------------
(5)(a) -- Opinion of Brunilda Santos de Alvarez, Esq.........................
(5)(b) -- Opinion of Sullivan & Cromwell.....................................
(12) -- Computation of Consolidated Ratios of
Earnings to Fixed Charges and Earnings to Fixed
Charges and Preferred Stock Dividends..............................
(23)(a) -- Consent of Independent Accountants.................................
(23)(b) -- Consent of Brunilda Santos de Alvarez, Esq.
(included in Exhibit (5)(a)).......................................
(23)(c) -- Consent of Sullivan & Cromwell (included in
Exhibit (5)(b))....................................................
(24) -- Powers of attorney (included on pages II-7
through II-11).....................................................
(25)(a) -- Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of The First National Bank of
Chicago, as Trustee under the Senior Indenture of
Popular, Inc.......................................................
(25)(b) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of The First National Bank of Chicago, as Trustee under
Indenture of Popular International Bank, Inc.......................
(25)(c) -- Form T-1 Statement of Eligibility under the Trust Indenture Act of
1939 of The First National Bank of Chicago, as Trustee under
Indenture of Popular North America, Inc............................
II-16
July 8, 1999
The Board of Directors
Popular, Inc.,
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918.
The Board of Directors
Popular International Bank, Inc.
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918.
The Board of Directors
Popular North America, Inc.,
521 Fellowship Road,
Mt. Laurel, New Jersey 08054.
Ladies and Gentlemen:
This opinion is delivered in connection with the registration under the
Securities Act of 1933 (the "Act") of (i) senior debt securities (the "Popular
Senior Debt Securities"), subordinated debt securities (the "Popular
Subordinated Debt Securities") and shares of preferred stock, without par value
(the "Popular Preferred Stock"), of Popular, Inc., a Puerto Rico corporation
(the "Corporation"), (ii) senior debt securities (the "PNA Senior Debt
Securities") of Popular North America, Inc., a Delaware corporation ("PNA"),
bearing the unconditional guarantees (the "PNA Senior Debt Guarantees") of the
Corporation, subordinated debt securities (the "PNA Subordinated Debt
Securities") of PNA, bearing the unconditional guarantees (the "PNA Subordinated
Debt Guarantees") of the Corporation, and shares of preferred stock, par value
$.01 per share (the
<PAGE>
"PNA Preferred Stock") of PNA, bearing the unconditional guarantees (the "PNA
Preferred Stock Guarantees") of the Corporation, and (iii) senior debt
securities (the "PIB Senior Debt Securities") of Popular International Bank,
Inc., a Puerto Rico corporation ("PIB"), bearing the unconditional guarantees
(the "PIB Senior Debt Guarantees") of the Corporation, subordinated debt
securities (the "PIB Subordinated Debt Securities") of PIB, bearing the
unconditional guarantees (the "PIB Subordinated Debt Guarantees") of the
Corporation, and shares of preferred stock, par value $25.00 per share (the "PIB
Preferred Stock") of PIB, bearing the unconditional guarantees (the "PIB
Preferred Stock Guarantees") of the Corporation (the Popular Senior Debt
Securities, the Popular Subordinated Debt Securities, the PNA Senior Debt
Securities, the PNA Subordinated Debt Securities, the PIB Senior Debt Securities
and the PIB Subordinated Debt Securities are sometimes collectively referred to
herein as the "Debt Securities"; the PNA Senior Debt Guarantees, the PNA
Subordinated Debt Guarantees, the PNA Preferred Stock Guarantees, the PIB Senior
Debt Guarantees, the PIB Subordinated Debt Guarantees and the PIB Preferred
Stock Guarantees are sometimes collectively referred to herein as the
"Guarantees"; and the Debt Securities, the Popular Preferred Stock, the PNA
Preferred Stock and the PIB Preferred Stock are sometimes collectively referred
to herein as the "Securities"). The Securities are limited to an aggregate
initial offering price not to exceed $1,500,000,000. I, as Counsel to the
Corporation, have examined such corporate records, certificates and other
documents, and such questions of law, as I have considered necessary or
appropriate for the purposes of this opinion. On the basis of such examination,
I advise you that, in my opinion:
(i) Each of the Corporation and PIB has been duly incorporated and is an
existing corporation in good standing under the laws of the Commonwealth of
Puerto Rico.
(ii) When the registration statement relating to the Securities and the
Guarantees (the "Registration Statement") has become effective under the Act,
the terms of the Popular Senior Debt Securities and of their issuance and sale
have been duly established in conformity with the indenture relating to the
Popular Senior Debt Securities, as supplemented (the "Popular Senior
Indenture"), so as not to
[-2-]
<PAGE>
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Corporation and so as to comply with
any requirement or restriction imposed by any court or governmental body having
jurisdiction over the Corporation, and the Popular Senior Debt Securities have
been duly executed and authenticated in accordance with the Popular Senior
Indenture and issued and sold as contemplated in the Registration Statement, the
Popular Senior Debt Securities will constitute valid and legally binding
obligations of the Corporation, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(iii) When the Registration Statement has become effective under the Act,
the terms of the Popular Subordinated Debt Securities and of their issuance and
sale have been duly established in conformity with the indenture relating to the
Popular Subordinated Debt Securities (the "Popular Subordinated Indenture") so
as not to violate any applicable law or result in a default under or breach of
any agreement or instrument binding upon the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over the Corporation, and the Popular Subordinated Debt
Securities have been duly executed and authenticated in accordance with the
Popular Subordinated Indenture and issued and sold as contemplated in the
Registration Statement, the Popular Subordinated Debt Securities will constitute
valid and legally binding obligations of the Corporation, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(iv) When the Registration Statement has become effective under the Act,
the terms of the PNA Senior Debt Securities and of the PNA Senior Debt
Guarantees and of their issuance and sale have been duly established in
conformity with the indenture relating to the PNA Senior Debt Securities and the
PNA Senior Debt Guarantees, as supplemented (the "PNA Senior Indenture"), so as
not to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon PNA or
[-3-]
<PAGE>
the Corporation and so as to comply with any requirement or restriction imposed
by any court or governmental body having jurisdiction over PNA or the
Corporation, the PNA Senior Debt Securities have been duly executed and
authenticated and the PNA Senior Debt Guarantees have been duly executed, each
in accordance with the PNA Senior Indenture, and the PNA Senior Debt Securities
and the PNA Senior Debt Guarantees have been issued and sold as contemplated in
the Registration Statement, the PNA Senior Debt Securities will constitute valid
and legally binding obligations of PNA and the PNA Senior Debt Guarantees will
constitute valid and legally binding obligations of the Corporation, in each
case subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(v) When the Registration Statement has become effective under the Act,
the indenture relating to the PNA Subordinated Debt Securities and the PNA
Subordinated Debt Guarantees (the "PNA Subordinated Indenture") has been duly
executed and delivered, the terms of the PNA Subordinated Debt Securities and of
the PNA Subordinated Debt Guarantees and of their issuance and sale have been
duly established in conformity with the PNA Subordinated Indenture so as not to
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon PNA or the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over PNA or the Corporation, the PNA Subordinated Debt
Securities have been duly executed and authenticated and the PNA Subordinated
Debt Guarantees have been duly executed, each in accordance with the PNA
Subordinated Indenture, and the PNA Subordinated Debt Securities and the PNA
Subordinated Debt Guarantees have been issued and sold as contemplated in the
Registration Statement, the PNA Subordinated Debt Securities will constitute
valid and legally binding obligations of PNA and the PNA Subordinated Debt
Guarantees will constitute valid and legally binding obligations of the
Corporation, in each case subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
[-4-]
<PAGE>
(vi) When the Registration Statement has become effective under the Act,
the indenture relating to the PIB Senior Debt Securities and the PIB Senior Debt
Guarantees (the "PIB Senior Indenture") has been duly executed and delivered,
the terms of the PIB Senior Debt Securities and of the PIB Senior Debt
Guarantees and of their issuance and sale have been duly established in
conformity with the PIB Senior Indenture so as not to violate any applicable law
or result in a default under or breach of any agreement or instrument binding
upon PIB or the Corporation and so as to comply with any requirement or
restriction imposed by any court or governmental body having jurisdiction over
PIB or the Corporation, the PIB Senior Debt Securities have been duly executed
and authenticated and the PIB Senior Debt Guarantees have been duly executed,
each in accordance with the PIB Senior Indenture, and the PIB Senior Debt
Securities and the PIB Senior Debt Guarantees have been issued and sold as
contemplated in the Registration Statement, the PIB Senior Debt Securities will
constitute valid and legally binding obligations of PIB and the PIB Senior Debt
Guarantees will constitute valid and legally binding obligations of the
Corporation, in each case subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(vii) When the Registration Statement has become effective under the Act,
the indenture relating to the PIB Subordinated Debt Securities and the PIB
Subordinated Guarantees (the "PIB Subordinated Indenture") has been duly
executed and delivered, the terms of the PIB Subordinated Debt Securities and of
the PIB Subordinated Debt Guarantees and of their issuance and sale have been
duly established in conformity with the PIB Subordinated Indenture so as not to
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon PIB or the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over PIB or the Corporation, and the PIB Subordinated Debt
Securities have been duly executed and authenticated and the PIB Subordinated
Debt Guarantees have been duly executed, each in accordance with the PIB
Subordinated Indenture, and the PIB Subordinated Debt Securities and the PIB
Subordinated Debt Guarantees have
[-5-]
<PAGE>
been issued and sold as contemplated in the Registration Statement, the PIB
Subordinated Debt Securities will constitute valid and legally binding
obligations of PIB and the PIB Subordinated Debt Guarantees will constitute
valid and legally binding obligations of the Corporation, in each case subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(viii) When the Registration Statement has become effective under the Act,
a certificate with respect to the Popular Preferred Stock has been duly filed
and recorded with the Department of State of the Commonwealth of Puerto Rico as
required by the General Corporation Law of the Commonwealth of Puerto Rico, the
terms of the Popular Preferred Stock and of its issue and sale have been duly
established in conformity with the Corporation's restated certificate of
incorporation so as not to violate any applicable law or result in a default
under or breach of any agreement or instrument binding upon the Corporation and
so as to comply with any requirement or restriction imposed by any court or
governmental body having jurisdiction over the Corporation, all regulatory
consents or approvals for the issuance and sale of the Popular Preferred Stock
have been obtained and the Popular Preferred Stock has been duly issued and sold
as contemplated by the Registration Statement, the Popular Preferred Stock will
be validly issued, fully paid, and nonassessable.
(ix) When the Registration Statement has become effective under the Act, a
certificate with respect to the PIB Preferred Stock has been duly filed and
recorded with the Department of State of the Commonwealth of Puerto Rico as
required by the General Corporation Law of the Commonwealth of Puerto Rico, the
terms of the PIB Preferred Stock and of its issue and sale have been duly
established in conformity with PIB's certificate of incorporation so as not to
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon PIB or the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over PIB or the Corporation, all regulatory consents or
approvals for the issuance and sale of the PIB Preferred Stock and for the
issuance of the PIB
[-6-]
<PAGE>
Preferred Stock Guarantees have been obtained, and the PIB Preferred Stock has
been duly issued and sold as contemplated by the Registration Statement, the
PIB Preferred Stock will be validly issued, fully paid and nonassessable, and
when the terms of the PIB Preferred Stock Guarantees have been duly approved by
the Board of Directors or other authorized officials of the Corporation and the
PIB Preferred Stock Guarantees have been duly executed, the PIB Preferred Stock
Guarantees will constitute valid and legally binding obligations of the
Corporation, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles.
(x) When the Registration Statement has become effective under the Act, a
certificate of designations with respect to the PNA Preferred Stock has been
duly filed and recorded with the Secretary of State of the State of Delaware,
the terms of the PNA Preferred Stock and of its issue and sale have been duly
established in conformity with PNA's certificate of incorporation, as amended,
so as not to violate any applicable law or result in a default under or breach
of any agreement or instrument binding upon PNA or the Corporation and so as to
comply with any requirement or restriction imposed by any court or governmental
body having jurisdiction over PNA or the Corporation, all regulatory consents or
approvals for the issuance and sale of the PNA Preferred Stock and for the
issuance of the PNA Preferred Stock Guarantees have been obtained, when the
terms of the PNA Preferred Stock Guarantees have been duly approved by the Board
of Directors or other authorized officials of the Corporation and the PNA
Preferred Stock Guarantees have been duly executed, and the PNA Preferred Stock
and the PNA Preferred Stock Guarantees have been duly issued and sold as
contemplated by the Registration Statement, the PNA Preferred Stock Guarantees
will constitute valid and legally binding obligations of the Corporation,
subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
I note that, as of the date of this opinion, a judgment for money in an
action based on a Debt Security denominated
[-7-]
<PAGE>
in a foreign currency or currency unit, or on a related Guarantee, in a Federal
or state court in the United States ordinarily would be enforced in the United
States only in United States dollars. The date used to determine the rate of
conversion of the foreign currency or currency unit in which a particular Debt
Security is denominated into United States dollars will depend on various
factors, including which court renders the judgment. In the case of a Debt
Security denominated in a foreign currency, or a related Guarantee, a state
court in the State of New York rendering a judgment on a Debt Security, or on a
related Guarantee, would be required under Section 27 of the New York Judiciary
Law to render such judgment in the foreign currency in which the Debt Security
is denominated, and such judgment would be converted into United States dollars
at the exchange rate prevailing on the date of entry of the judgment.
The foregoing opinion is limited to the Federal laws of the United States,
the General Corporation Law of the State of Delaware and the laws of the State
of New York and the Commonwealth of Puerto Rico, and I am expressing no opinion
as to the effect of the laws of any other jurisdiction. With respect to all
matters of the laws of the State of New York, I have relied upon the opinion,
dated the date hereof, of Sullivan & Cromwell, and my opinion is subject to the
same assumptions, qualifications and limitations with respect to such matters as
are contained in such opinion of Sullivan & Cromwell.
Also, I have relied as to certain matters on information obtained from
public officials, officers of the Corporation, PNA and PIB, and other sources
believed by me to be responsible, and I have assumed that each of the Popular
Senior Indenture, the Popular Subordinated Indenture and the PNA Senior
Indenture has been duly authorized, executed and delivered by the respective
Trustee thereunder, assumptions which I have not independently verified.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the heading "Validity of
Offered Securities" in
[-8-]
<PAGE>
the Prospectus contained in the Registration Statement. In giving such
consent, I do not thereby admit that I am in the category of persons whose
consent is required under Section 7 of the Act.
Very truly yours,
Brunilda Santos de Alvarez
[-9-]
July 8, 1999
Popular, Inc.,
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918.
Popular International Bank, Inc.,
c/o Popular Inc.
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918.
Popular North America, Inc.,
521 Fellowship Road,
Mt. Laurel, New Jersey 08054.
Ladies and Gentlemen:
This opinion is delivered in connection with the registration under the
Securities Act of 1933 (the "Act") of (i) senior debt securities (the "Popular
Senior Debt Securities"), subordinated debt securities (the "Popular
Subordinated Debt Securities") and shares of preferred stock, without par value
(the "Popular Preferred Stock"), of Popular, Inc., a Puerto Rico corporation
(the "Corporation"), (ii) senior debt securities (the "PNA Senior Debt
Securities") of Popular North America, Inc., a Delaware corporation ("PNA"),
bearing the unconditional guarantees (the "PNA Senior Debt
<PAGE>
Popular, Inc., -2-
Popular International Bank, Inc.,
Popular North America, Inc.
Guarantees") of the Corporation, subordinated debt securities of PNA (the "PNA
Subordinated Debt Securities"), bearing the unconditional guarantees (the "PNA
Subordinated Debt Guarantees") of the Corporation, and shares of preferred
stock, par value $.01 per share, of PNA (the "PNA Preferred Stock"), bearing the
unconditional guarantees (the "PNA Preferred Stock Guarantees") of the
Corporation, and (iii) senior debt securities (the "PIB Senior Debt Securities")
of Popular International Bank, Inc., a Puerto Rico corporation ("PIB"), bearing
the unconditional guarantees (the "PIB Senior Debt Guarantee") of the
Corporation, subordinated debt securities of PIB (the "PIB Subordinated Debt
Securities"), bearing the unconditional guarantees (the "PIB Subordinated Debt
Guarantees") of the Corporation and shares of preferred stock, par value $25.00
per share, of PIB (the "PIB Preferred Stock"), bearing the unconditional
guarantees (the "PIB Preferred Stock Guarantee") of the Corporation (the Popular
Senior Debt Securities, the Popular Subordinated Debt Securities, the PNA Senior
Debt Securities, the PNA Subordinated Debt Securities, the PIB Senior Debt
Securities and the PIB Subordinated Debt Securities are sometimes collectively
referred to herein as the "Debt Securities"; the PNA Senior Debt Guarantees, the
PNA Subordinated Debt Guarantees, the PNA Preferred Stock Guarantees, the PIB
Senior Debt Guarantees, the PIB Subordinated Debt Guarantees and the PIB
Preferred Stock Guarantees are sometimes collectively referred to herein as the
"Guarantees"; and the Debt Securities,
<PAGE>
Popular, Inc., -3-
Popular International Bank, Inc.,
Popular North America, Inc.
the Popular Preferred Stock, the PNA Preferred Stock and the PIB Preferred Stock
are sometimes collectively referred to herein as the "Securities"). The
Securities are limited to an aggregate initial offering price not to exceed
$1,500,000,000. We, as your counsel, have examined such corporate records,
certificates and other documents, and such questions of law, as we have
considered necessary or appropriate for the purposes of this opinion. On the
basis of such examination, we advise you that, in our opinion:
(1) When the registration statement relating to the Securities and the
Guarantees (the "Registration Statement") has become effective under the Act,
the terms of the Popular Senior Debt Securities and of their issuance and sale
have been duly established in conformity with the indenture relating to the
Popular Senior Debt Securities, as supplemented (the "Popular Senior
Indenture"), so as not to violate any applicable law or result in a default
under or breach of any agreement or instrument binding upon the Corporation and
so as to comply with any requirement or restriction imposed by any court or
governmental body having jurisdiction over the Corporation, and the Popular
Senior Debt Securities have been duly executed and authenticated in accordance
with the Popular Senior Indenture and issued and sold as contemplated in the
Registration Statement, the Popular Senior Debt Securities will constitute valid
and legally binding obligations of the Corporation, subject to bankruptcy,
insolvency,
<PAGE>
Popular, Inc., -4-
Popular International Bank, Inc.,
Popular North America, Inc.
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(2) When the Registration Statement has become effective under the Act,
the terms of the Popular Subordinated Debt Securities and of their issuance and
sale have been duly established in conformity with the indenture relating to the
Popular Subordinated Debt Securities (the "Popular Subordinated Indenture") so
as not to violate any applicable law or result in a default under or breach of
any agreement or instrument binding upon the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over the Corporation, and the Popular Subordinated Debt
Securities have been duly executed and authenticated in accordance with the
Popular Subordinated Indenture and issued and sold as contemplated in the
Registration Statement, the Popular Subordinated Debt Securities will constitute
valid and legally binding obligations of the Corporation, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to general
equity principles.
(3) When the Registration Statement has become effective under the Act,
the terms of the PNA Senior Debt Securities and of the PNA Senior Debt
Guarantees and of their issuance and sale have been duly established in
conformity with the indenture relating to the PNA Senior Debt Securities and the
PNA Senior Debt Guarantees, as
<PAGE>
Popular, Inc., -5-
Popular International Bank, Inc.,
Popular North America, Inc.
supplemented (the "PNA Senior Indenture"), so as not to violate any applicable
law or result in a default under or breach of any agreement or instrument
binding upon PNA or the Corporation and so as to comply with any requirement or
restriction imposed by any court or governmental body having jurisdiction over
PNA or the Corporation, the PNA Senior Debt Securities have been duly executed
and authenticated and the PNA Senior Debt Guarantees have been duly executed,
each in accordance with the PNA Senior Indenture, and the PNA Senior Debt
Securities have been issued and sold as contemplated in the Registration
Statement, the PNA Senior Debt Securities will constitute valid and legally
binding obligations of PNA and the PNA Senior Debt Guarantees will constitute
valid and legally binding obligations of the Corporation, in each case subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(4) When the Registration Statement has become effective under the Act,
the indenture relating to the PNA Subordinated Debt Securities and the PNA
Subordinated Debt Guarantees (the "PNA Subordinated Indenture") has been duly
executed and delivered by PNA, the Corporation and the trustee thereunder, the
terms of the PNA Subordinated Debt Securities and of the PNA Subordinated Debt
Guarantees and of their issuance and sale have been duly established in
conformity with the PNA Subordinated Indenture so as not
<PAGE>
Popular, Inc., -6-
Popular International Bank, Inc.,
Popular North America, Inc.
to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon PNA or the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over PNA or the Corporation, the PNA Subordinated Debt
Securities have been duly executed and authenticated and the PNA Subordinated
Debt Guarantees have been duly executed, each in accordance with the PNA
Subordinated Indenture, and the PNA Subordinated Debt Securities have been
issued and sold as contemplated in the Registration Statement, the PNA
Subordinated Debt Securities will constitute valid and legally binding
obligations of PNA and the PNA Subordinated Debt Guarantees will constitute
valid and legally binding obligations of the Corporation, in each case subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(5) When the Registration Statement has become effective under the Act,
the indenture relating to the PIB Senior Debt Securities and the PIB Senior Debt
Guarantees (the "PIB Senior Indenture") has been duly executed and delivered by
PIB, the Corporation and the trustee thereunder, the terms of the PIB Senior
Debt Securities and of the PIB Senior Debt Guarantees and of their issuance and
sale have been duly established in conformity with the PIB Senior Indenture so
as not to violate any
<PAGE>
Popular, Inc., -7-
Popular International Bank, Inc.,
Popular North America, Inc.
applicable law or result in a default under or breach of any agreement or
instrument binding upon PIB or the Corporation and so as to comply with any
requirement or restriction imposed by any court or governmental body having
jurisdiction over PIB or the Corporation, the PIB Senior Debt Securities have
been duly executed and authenticated and the PIB Senior Debt Guarantees have
been duly executed, each in accordance with the PIB Senior Indenture, and the
PIB Senior Debt Securities have been issued and sold as contemplated in the
Registration Statement, the PIB Senior Debt Securities will constitute valid and
legally binding obligations of PIB and the PIB Senior Debt Guarantees will
constitute valid and legally binding obligations of the Corporation, in each
case subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(6) When the Registration Statement has become effective under the Act,
the indenture relating to the PIB Subordinated Debt Securities and the PIB
Subordinated Guarantees (the "PIB Subordinated Indenture") has been duly
executed and delivered by PIB, the Corporation and the trustee thereunder, the
terms of the PIB Subordinated Debt Securities and of the PIB Subordinated Debt
Guarantees and of their issuance and sale have been duly established in
conformity with the PIB Subordinated Indenture so as not to violate any
applicable law or result in a default under or breach of
<PAGE>
Popular, Inc., -8-
Popular International Bank, Inc.,
Popular North America, Inc.
any agreement or instrument binding upon PIB or the Corporation and so as to
comply with any requirement or restriction imposed by any court or governmental
body having jurisdiction over PIB or the Corporation, the PIB Subordinated Debt
Securities have been duly executed and authenticated and the PIB Subordinated
Debt Guarantees have been duly executed, each in accordance with the PIB
Subordinated Indenture, and the PIB Subordinated Debt Securities have been
issued and sold as contemplated in the Registration Statement, the PIB
Subordinated Debt Securities will constitute valid and legally binding
obligations of PIB and the PIB Subordinated Debt Guarantees will constitute
valid and legally binding obligations of the Corporation, in each case subject
to bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
(7) When the Registration Statement has become effective under the Act,
a certificate of designations with respect to the PNA Preferred Stock has been
duly filed and recorded with the Secretary of State of the State of Delaware,
the terms of the PNA Preferred Stock and of its issue and sale have been duly
established in conformity with PNA's certificate of incorporation, as amended,
so as not to violate any applicable law or result in a default under or breach
of any agreement or instrument binding upon PNA or the Corporation and so as to
comply with any requirement or restriction imposed
<PAGE>
Popular, Inc., -9-
Popular International Bank, Inc.,
Popular North America, Inc.
by any court or governmental body having jurisdiction over PNA or the
Corporation, and the PNA Preferred Stock have been duly issued and sold as
contemplated by the Registration Statement, the PNA Preferred Stock will be
validly issued, fully paid and nonassessable, and when the terms of the PNA
Preferred Stock Guarantees have been duly approved by the Board of Directors or
other authorized officials of the Corporation and the PNA Preferred Stock
Guarantees have been duly executed, the PNA Preferred Stock Guarantees will
constitute valid and legally binding obligations of the Corporation, subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles.
We note that, as of the date of this opinion, a judgment for money in
an action based on a Debt Security denominated in a foreign currency or currency
unit, or on a related Guarantee, in a Federal or state court in the United
States ordinarily would be enforced in the United States only in United States
dollars. The date used to determine the rate of conversion of the foreign
currency or currency unit in which a particular Debt Security is denominated
into United States dollars will depend on various factors, including which court
renders the judgment. In the case of a Debt Security denominated in a foreign
currency, or a related Guarantee, a state court in the State of New York
rendering a judgment on a Debt Security, or on a related Guarantee, would be
required
<PAGE>
Popular, Inc., -10-
Popular International Bank, Inc.,
Popular North America, Inc.
under Section 27 of the New York Judiciary Law to render such judgment in the
foreign currency in which the Debt Security is denominated, and such judgment
would be converted into United States dollars at the exchange rate prevailing on
the date of entry of the judgment.
The foregoing opinion is limited to the Federal laws of the United
States, the laws of the State of New York and the Commonwealth of Puerto Rico,
and the General Corporation Law of the State of Delaware, and we are expressing
no opinion as to the effect of the laws of any other jurisdiction. With respect
to all matters of the laws of the Commonwealth of Puerto Rico, we have relied
upon the opinion, dated the date hereof, of Brunilda Santos de Alvarez, Counsel
to the Corporation, and our opinion is subject to the same assumptions,
qualifications and limitations with respect to such matters as are contained in
such opinion of Brunilda Santos de Alvarez.
Also, we have relied as to certain matters on information obtained from
public officials, officers of the Corporation, PNA and PIB, and other sources
believed by us to be responsible, and we have assumed that each of the Popular
Senior Indenture, the Popular Subordinated Indenture and the PNA Senior
Indenture has been duly authorized, executed and delivered by the respective
trustees thereunder, assumptions that we have not independently verified.
<PAGE>
Popular, Inc., -11-
Popular International Bank, Inc.,
Popular North America, Inc.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the references to us under the heading "Validity
of Offered Securities" in the Prospectus contained in the Registration
Statement. In giving such consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
SULLIVAN & CROMWELL
Exhibit 12
POPULAR, INC.
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
AND PREFERRED STOCK DIVIDENDS
(Dollars in thousands)
<TABLE>
<CAPTION>
Quarter ended
March 31, Year Ended December 31,
1999 1998 1997 1996 1995 1994
<S> <C> <C> <C> <C> <C> <C>
Income before income taxes 86,066 307,019 284,026 256,027 206,130 175,177
Fixed charges:
Interest expense 207,956 779,444 707,348 591,540 521,624 351,633
Estimated interest component
of net rental payments 2,204 8,817 7,779 7,065 6,012 5,588
Total fixed charges including
interest on deposits 210,160 788,261 715,127 598,605 527,636 357,201
Less: Interests on deposits 110,823 411,517 366,528 350,221 329,783 247,726
Total fixed charges excluding
interest on deposits 99,337 376,744 348,599 248,384 197,853 109,475
Income before income taxes and fixed
charges (including interest on deposits) $296,226 $1,095,280 $999,153 $854,632 $733,766 $532,378
Income before income taxes and fixed
charges (excluding interest on deposits) $185,403 $683,763 $632,625 $504,411 $403,983 $284,652
Preferred stock dividends 2,087 8,350 8,350 8,350 8,350 4,630
Ratios of earnings to fixed charges
Including interest on Deposits 1.4 1.4 1.4 1.4 1.4 1.5
Excluding interest on Deposits 1.9 1.8 1.8 2.0 2.0 2.6
Ratio of earnings to fixed charges &
Preferred Stock Dividends
Including interest on Deposits 1.4 1.4 1.4 1.4 1.4 1.5
Excluding interest on Deposits 1.8 1.8 1.8 2.0 2.0 2.5
Preferred Stock Dividends 2,087 8,350 8,350 8,350 8,350 4,630
Rental expense 6,613 26,451 23,336 21,196 18,037 16,705
</TABLE>
EXHIBIT 23(B)
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated March 5, 1999 relating to the
financial statements, which appears on page F-29 of the 1998 Annual Report to
Shareholders of Popular, Inc., which is incorporated by reference in Popular,
Inc.'s Annual Report on Form 10K for the year ended December 31, 1998. We also
consent to the reference to us under the heading "Experts" in such Registration
Statement.
PRICEWATERHOUSECOOPERS LLP
San Juan, Puerto Rico
July 8, 1999
Exhibit 25(a)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
----------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
-----------------------------
POPULAR, INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
PUERTO RICO 66-0416582
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
209 MUNOZ RIVERA AVENUE
HATO REY, PUERTO RICO 00918
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
DEBT SECURITIES
(TITLE OF INDENTURE SECURITIES)
<PAGE>
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART
OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
<PAGE>
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 23rd day of June, 1999.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
By /s/ John R. Prendiville
John R. Prendiville
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc. filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
June 23, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of an indenture between Popular,
Inc. and The First National Bank of Chicago, the undersigned, in accordance with
Section 321(b) of the Trust Indenture Act of 1939, as amended, hereby consents
that the reports of examinations of the undersigned, made by Federal or State
authorities authorized to make such examinations, may be furnished by such
authorities to the Securities and Exchange Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ John R. Prendiville
John R. Prendiville
Vice President
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago
Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
---------
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS
C400 RCFD BIL MIL THOU
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
a. Noninterest-bearing balances and currency and coin(1)............. 0081 3,809,517 1.a
b. Interest-bearing balances(2)...................................... 0071 4,072,166 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)......... 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)...... 1773 12,885,728 2.b
3. Federal funds sold and securities purchased under agreements to
resell............................................................... 1350 4,684,756 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule RCFD
RC-C)............................................................. 2122 34,304,806 4.a
b. LESS: Allowance for loan and lease losses......................... 3123 411,476 4.b
c. LESS: Allocated transfer risk reserve............................. 3128 3,884 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
reserve (item 4.a minus 4.b and 4.c).............................. 2125 33,889,446 4.d
5. Trading assets (from Schedule RD-D).................................. 3545 5,100,499 5.
6. Premises and fixed assets (including capitalized leases)............. 2145 754,052 6.
7. Other real estate owned (from Schedule RC-M)......................... 2150 5,244 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)....................................... 2130 201,068 8.
9. Customers' liability to this bank on acceptances outstanding......... 2155 265,041 9.
10. Intangible assets (from Schedule RC-M)............................... 2143 285,709 10.
11. Other assets (from Schedule RC-F).................................... 2160 2,987,184 11.
12. Total assets (sum of items 1 through 11)............................. 2170 68,940,410 12.
<FN>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</FN>
</TABLE>
<PAGE>
Legal Title of Bank: The First National Bank of Chicago
Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
from Schedule RC-E, part 1)...................................... 2200 22,163,664 13.a
(1) Noninterest-bearing(1)....................................... 6631 9,740,100 13.a1
(2) Interest-bearing............................................. 6636 12,423,564 13.a2
b. In foreign offices, Edge and Agreement subsidiaries, and RCFN
IBFs (from Schedule RC-E, part II)............................... 2200 19,273,426 13.b
(1) Noninterest bearing.......................................... 6631 334,741 13.b1
(2) Interest-bearing............................................. 6636 18,938,685 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,405,792 14
15. a. Demand notes issued to the U.S. Treasury......................... RCON 2840 173,505 15.a
b. Trading Liabilities(from Sechedule RC-D)......................... RCFD 3548 4,824,567 15.b
16. Other borrowed money: RCFD
a. With original maturity of one year or less....................... 2332 7,453,761 16.a
b. With original maturity of more than one year.................... A547 330,300 16.b
c. With original maturity of more than three years.................. A548 357,737 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding 2920 265,041 18.
19. Subordinated notes and debentures................................... 3200 2,600,000 19.
20. Other liabilities (from Schedule RC-G).............................. 2930 1,878,367 20.
21. Total liabilities (sum of items 13 through 20)...................... 2948 63,726,160 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus....................... 3838 0 23.
24. Common stock........................................................ 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock) 3839 3,239,836 25.
26. a. Undivided profits and capital reserves........................... 3632 1,813,367 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities....................................................... 8434 (37,357) 26.b
c. ACCUMULATED NET GAINS (LOSSES) ON CASH FLOW HEDGES............... 4336 0 26.c
27. Cumulative foreign currency translation adjustments................. 3284 (2,454) 27.
28. Total equity capital (sum of items 23 through 27)................... 3210 5,214,250 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)............................... 3300 68,940,410 29.
<FN>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed for -----------------
the bank by independent external Number auditors as of any date during [ N/A M.1.]
1996 .........RCFD 6724 .................... -----------------
1 = Independent audit of the bank conducted in accordance 4. = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
</FN>
</TABLE>
Exhibit 25(b)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
----------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
-----------------------------
POPULAR INTERNATIONAL BANK, INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
PUERTO RICO 66-0489108
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
209 MUNOZ RIVERA AVENUE
HATO REY, PUERTO RICO 00918
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
GUARANTEE OF DEBT SECURITIES
OF POPULAR, INC.
(TITLE OF INDENTURE SECURITIES)
<PAGE>
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART
OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
<PAGE>
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 23rd day of June, 1999.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
By /s/ John R. Prendiville
John R. Prendiville
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc. filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
June 23, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of a guarantee agreement between
Popular International Bank, Inc. and The First National Bank of Chicago, the
undersigned, in accordance with Section 321(b) of the Trust Indenture Act of
1939, as amended, hereby consents that the reports of examinations of the
undersigned, made by Federal or State authorities authorized to make such
examinations, may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ John R. Prendiville
John R. Prendiville
Vice President
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago
Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS
C400 RCFD BIL MIL THOU
<S> <C> <C> <C>
ASSETS
1. Cash and balances due from depository institutions (from Schedule
RC-A): RCFD
a. Noninterest-bearing balances and currency and coin(1) 0081 3,809,517 1.a
b. Interest-bearing balances(2)...................................... 0071 4,072,166 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A) 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)...... 1773 12,885,728 2.b
3. Federal funds sold and securities purchased under agreements to
resell............................................................... 1350 4,684,756 3.
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from Schedule
RC-C)............................................................. 2122 34,304,806 4.a
b. LESS: Allowance for loan and lease losses......................... 3123 411,476 4.b
c. LESS: Allocated transfer risk reserve............................. 3128 3,884 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
reserve (item 4.a minus 4.b and 4.c).............................. 2125 33,889,446 4.d
5. Trading assets (from Schedule RD-D).................................. 3545 5,100,499 5.
6. Premises and fixed assets (including capitalized leases)............. 2145 754,052 6.
7. Other real estate owned (from Schedule RC-M)......................... 2150 5,244 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M)....................................... 2130 201,068 8.
9. Customers' liability to this bank on acceptances outstanding 2155 265,041 9.
10. Intangible assets (from Schedule RC-M)............................... 2143 285,709 10.
11. Other assets (from Schedule RC-F).................................... 2160 2,987,184 11.
12. Total assets (sum of items 1 through 11)............................. 2170 68,940,410 12.
<FN>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</FN>
</TABLE>
<PAGE>
Legal Title of Bank: The First National Bank of Chicago
Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
SCHEDULE RC-CONTINUED
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN
THOUSANDS
<S> <C> <C> <C>
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A and C RCON
from Schedule RC-E, part 1).................................... 2200 22,163,664 13.a
(1) Noninterest-bearing(1)..................................... 6631 9,740,100 13.a1
(2) Interest-bearing........................................... 6636 12,423,564 13.a2
b. In foreign offices, Edge and Agreement subsidiaries, and RCFN
IBFs (from Schedule RC-E, part II)............................. 2200 19,273,426 13.b
(1) Noninterest bearing........................................ 6631 334,741 13.b1
(2) Interest-bearing........................................... 6636 18,938,685 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,405,792 14
15. a. Demand notes issued to the U.S. Treasury....................... RCON 2840 173,505 15.a
b. Trading Liabilities(from Sechedule RC-D)....................... RCFD 3548 4,824,567 15.b
16. Other borrowed money: RCFD
a. With original maturity of one year or less..................... 2332 7,453,761 16.a
b. With original maturity of more than one year.................. A547 330,300 16.b
c. With original maturity of more than three years................ A548 357,737 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding........... 2920 265,041 18.
19. Subordinated notes and debentures................................. 3200 2,600,000 19.
20. Other liabilities (from Schedule RC-G)............................ 2930 1,878,367 20.
21. Total liabilities (sum of items 13 through 20).................... 2948 63,726,160 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus..................... 3838 0 23.
24. Common stock...................................................... 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock).......... 3839 3,239,836 25.
26. a. Undivided profits and capital reserves......................... 3632 1,813,367 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities..................................................... 8434 (37,357) 26.b
c. ACCUMULATED NET GAINS (LOSSES) ON CASH FLOW HEDGES............. 4336 0 26.c
27. Cumulative foreign currency translation adjustments............... 3284 (2,454) 27.
28. Total equity capital (sum of items 23 through 27)................. 3210 5,214,250 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)............................. 3300 68,940,410 29.
<FN>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed] -------------------
for the bank by independent external auditors as of any date during [ N/A M.1.]
1996 ..............RCFD 6724 ..................... -------------------
1 = Independent audit of the bank conducted in accordance 4. = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
(1) Includes total demand deposits and noninterest-bearing time and savings deposits.
</FN>
</TABLE>
Exhibit 25(c)
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(B)(2)
----------------------------
THE FIRST NATIONAL BANK OF CHICAGO
(EXACT NAME OF TRUSTEE AS SPECIFIED IN ITS CHARTER)
A NATIONAL BANKING ASSOCIATION 36-0899825
(I.R.S. EMPLOYER
IDENTIFICATION NUMBER)
ONE FIRST NATIONAL PLAZA, CHICAGO, ILLINOIS 60670-0126
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
THE FIRST NATIONAL BANK OF CHICAGO
ONE FIRST NATIONAL PLAZA, SUITE 0286
CHICAGO, ILLINOIS 60670-0286
ATTN: LYNN A. GOLDSTEIN, LAW DEPARTMENT (312) 732-6919
(NAME, ADDRESS AND TELEPHONE NUMBER OF AGENT FOR SERVICE)
-----------------------------
POPULAR NORTH AMERICA, INC.
(EXACT NAME OF OBLIGOR AS SPECIFIED IN ITS CHARTER)
DELAWARE 66-0476353
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
521 FELLOWSHIP ROAD
MT. LAUREL, NEW JERSEY 08054
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
GUARANTEE OF DEBT SECURITIES
OF POPULAR, INC.
(TITLE OF INDENTURE SECURITIES)
<PAGE>
ITEM 1. GENERAL INFORMATION. FURNISH THE FOLLOWING
INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR
SUPERVISING AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of Currency, Washington, D.C., Federal Deposit
Insurance Corporation, Washington, D.C., The Board of
Governors of the Federal Reserve System, Washington D.C.
(B) WHETHER IT IS AUTHORIZED TO EXERCISE
CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR. IF THE OBLIGOR
IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
No such affiliation exists with the trustee.
ITEM 16. LIST OF EXHIBITS. LIST BELOW ALL EXHIBITS FILED AS A PART
OF THIS STATEMENT OF ELIGIBILITY.
1. A copy of the articles of association of the
trustee now in effect.*
2. A copy of the certificates of authority of the trustee to
commence business.*
3. A copy of the authorization of the trustee to exercise
corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not Applicable.
6. The consent of the trustee required by Section 321(b) of
the Act.
<PAGE>
7. A copy of the latest report of condition of the trustee
published pursuant to law or the requirements of its
supervising or examining authority.
8. Not Applicable.
9. Not Applicable.
Pursuant to the requirements of the Trust Indenture Act of 1939, as
amended, the trustee, The First National Bank of Chicago, a national banking
association organized and existing under the laws of the United States of
America, has duly caused this Statement of Eligibility to be signed on its
behalf by the undersigned, thereunto duly authorized, all in the City of Chicago
and the State of Illinois, on this 23rd day of June, 1999.
THE FIRST NATIONAL BANK OF CHICAGO,
TRUSTEE
By /s/ John R. Prendiville
John R. Prendiville
Vice President
* Exhibits 1, 2, 3 and 4 are herein incorporated by reference to Exhibits
bearing identical numbers in Item 16 of the Form T-1 of The First National Bank
of Chicago, filed as Exhibit 25 to the Registration Statement on Form S-3 of U S
WEST Capital Funding, Inc. filed with the Securities and Exchange Commission on
May 6, 1998 (Registration No. 333-51907-01).
<PAGE>
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
June 23, 1999
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
In connection with the qualification of a guarantee agreement between
Popular North America, Inc. and The First National Bank of Chicago, the
undersigned, in accordance with Section 321(b) of the Trust Indenture Act of
1939, as amended, hereby consents that the reports of examinations of the
undersigned, made by Federal or State authorities authorized to make such
examinations, may be furnished by such authorities to the Securities and
Exchange Commission upon its request therefor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
By /s/ John R. Prendiville
John R. Prendiville
Vice President
<PAGE>
EXHIBIT 7
Legal Title of Bank: The First National Bank of Chicago
Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-1
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
CONSOLIDATED REPORT OF CONDITION FOR INSURED COMMERCIAL
AND STATE-CHARTERED SAVINGS BANKS FOR MARCH 31, 1999
All schedules are to be reported in thousands of dollars. Unless otherwise
indicated, report the amount outstanding of the last business day of the
quarter.
SCHEDULE RC--BALANCE SHEET
<TABLE>
<CAPTION>
DOLLAR AMOUNTS IN THOUSANDS C400
----
RCFD BIL MIL THOU
---- ------------
ASSETS
<S> <C> <C> <C> <C>
1. Cash and balances due from depository institutions (from Schedule RCFD
RC-A): ----
a. Noninterest-bearing balances and currency and coin(1).................... 0081 3,809,517 1.a
b. Interest-bearing balances(2)............................................. 0071 4,072,166 1.b
2. Securities
a. Held-to-maturity securities(from Schedule RC-B, column A)................ 1754 0 2.a
b. Available-for-sale securities (from Schedule RC-B, column D)............. 1773 12,885,728 2.b
3. Federal funds sold and securities purchased under agreements to
resell 1350 4,684,756 3.
4. Loans and lease financing receivables: RCFD
a. Loans and leases, net of unearned income (from Schedule ----
RC-C)....................................................................... 2122 34,304,806 4.a
b. LESS: Allowance for loan and lease losses................................ 3123 411,476 4.b
c. LESS: Allocated transfer risk reserve.................................... 3128 3,884 4.c
d. Loans and leases, net of unearned income, allowance, and RCFD
reserve (item 4.a minus 4.b and 4.c)..................................... 2125 33,889,446 4.d
5. Trading assets (from Schedule RD-D)......................................... 3545 5,100,499 5.
6. Premises and fixed assets (including capitalized leases) 2145 754,052 6.
7. Other real estate owned (from Schedule RC-M)................................ 2150 5,244 7.
8. Investments in unconsolidated subsidiaries and associated
companies (from Schedule RC-M).............................................. 2130 201,068 8.
9. Customers' liability to this bank on acceptances outstanding................ 2155 265,041 9.
10. Intangible assets (from Schedule RC-M)...................................... 2143 285,709 10.
11. Other assets (from Schedule RC-F)........................................... 2160 2,987,184 11.
12. Total assets (sum of items 1 through 11).................................... 2170 68,940,410 12.
<FN>
(1) Includes cash items in process of collection and unposted debits.
(2) Includes time certificates of deposit not held for trading.
</FN>
</TABLE>
<PAGE>
Legal Title of Bank: The First National Bank of Chicago
Call Date: 03/31/99 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Ste 0460 Page RC-2
City, State Zip: Chicago, IL 60670
FDIC Certificate No.: 0/3/6/1/8
<TABLE>
<CAPTION>
SCHEDULE RC-CONTINUED
DOLLAR AMOUNTS IN
THOUSANDS
LIABILITIES
<S> <C> <C> <C>
13. Deposits: RCON
a. In domestic offices (sum of totals of columns A and C ----
from Schedule RC-E, part 1).............................................. 2200 22,163,664 13.a
(1) Noninterest-bearing(1)............................................... 6631 9,740,100 13.a1
(2) Interest-bearing..................................................... 6636 12,423,564 13.a2
RCFN
b. In foreign offices, Edge and Agreement subsidiaries, and ----
IBFs (from Schedule RC-E, part II)....................................... 2200 19,273,426 13.b
(1) Noninterest bearing.................................................. 6631 334,741 13.b1
(2) Interest-bearing..................................................... 6636 18,938,685 13.b2
14. Federal funds purchased and securities sold under agreements
to repurchase: RCFD 2800 4,405,792 14
15. a. Demand notes issued to the U.S. Treasury RCON 2840 173,505 15.a
b. Trading Liabilities(from Sechedule RC-D)................................. RCFD 3548 4,824,567 15.b
RCFD
16. Other borrowed money: ----
a. With original maturity of one year or less............................... 2332 7,453,761 16.a
b. With original maturity of more than one year............................ A547 330,300 16.b
c. With original maturity of more than three years.......................... A548 357,737 16.c
17. Not applicable
18. Bank's liability on acceptance executed and outstanding..................... 2920 265,041 18.
19. Subordinated notes and debentures........................................... 3200 2,600,000 19.
20. Other liabilities (from Schedule RC-G)...................................... 2930 1,878,367 20.
21. Total liabilities (sum of items 13 through 20).............................. 2948 63,726,160 21.
22. Not applicable
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus............................... 3838 0 23.
24. Common stock................................................................ 3230 200,858 24.
25. Surplus (exclude all surplus related to preferred stock).................... 3839 3,239,836 25.
26. a. Undivided profits and capital reserves................................... 3632 1,813,367 26.a
b. Net unrealized holding gains (losses) on available-for-sale
securities............................................................... 8434 (37,357) 26.b
c. ACCUMULATED NET GAINS (LOSSES) ON CASH FLOW HEDGES..................... 4336 0 26.c
27. Cumulative foreign currency translation adjustments......................... 3284 (2,454) 27.
28. Total equity capital (sum of items 23 through 27)........................... 3210 5,214,250 28.
29. Total liabilities, limited-life preferred stock, and equity
capital (sum of items 21, 22, and 28)....................................... 3300 68,940,410 29.
<FN>
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the statement below that
best describes the most comprehensive level of auditing work performed for ---------------
the bank by independent external Number auditors as of any date during [ N/A M.1.]
1996...............................................................RCFD 6724 ..... ---------------
1 = Independent audit of the bank conducted in accordance 4. = Directors' examination of the bank performed by other
with generally accepted auditing standards by a certified external auditors (may be required by state chartering
public accounting firm which submits a report on the bank authority)
2 = Independent audit of the bank's parent holding company 5 = Review of the bank's financial statements by external
conducted in accordance with generally accepted auditing auditors
standards by a certified public accounting firm which 6 = Compilation of the bank's financial statements by external
submits a report on the consolidated holding company auditors
(but not on the bank separately) 7 = Other audit procedures (excluding tax preparation work)
3 = Directors' examination of the bank conducted in 8 = No external audit work
accordance with generally accepted auditing standards
by a certified public accounting firm (may be required by
state chartering authority)
(1) Includes total demand deposits and noninterest-bearing time and savings
deposits.
</FN>
</TABLE>
