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As filed with the Securities and Exchange Commission on December 29, 2000
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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DORAL FINANCIAL CORPORATION
(Exact name of registrant as specified in its charter)
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COMMONWEALTH OF PUERTO RICO 66-0312162
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1159 FRANKLIN D. ROOSEVELT AVENUE
SAN JUAN, PUERTO RICO 00920
(787) 749-7100
(Address, including zip code, and telephone number,
including area code, of registrant's principal and executive offices)
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SALOMON LEVIS, CHIEF EXECUTIVE OFFICER
DORAL FINANCIAL CORPORATION
1159 FRANKLIN D. ROOSEVELT AVENUE
SAN JUAN, PUERTO RICO 00920
(787) 749-7100
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES TO:
IGNACIO ALVAREZ
EDUARDO J. ARIAS
PIETRANTONI MENDEZ & ALVAREZ LLP
SUITE 1901, BANCO POPULAR CENTER
209 MUNOZ RIVERA AVENUE
SAN JUAN, PUERTO RICO 00918
(787) 274-1212
APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC:
From time to time to time after the effective date of this Registration
Statement.
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, as amended, 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 under the Securities Act, please check the following box. [X]
CALCULATION OF REGISTRATION FEE
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Proposed Maximum
Aggregate Offering Amount of
Title of Each Class of Securities to be Registered Price (1) Registration Fee (2)(3)
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Debt Securities; Preferred Stock; Common Stock (4)(5).................. $250,000,000 $62,500
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(1) Estimated solely for purposes of computing the registration fee. The
proposed maximum offering price per unit will be determined from time to
time by the Registrant in connection with the issuance by the Registrant
of the securities registered hereunder.
(2) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act of 1933, as amended, and reflects the offering
price rather than the principal amount of any Debt Securities issued at
a discount.
(3) In no event will the aggregate offering price of all securities issued
from time to time pursuant to this registration statement exceed
$250,000,000 or the equivalent thereof in one or more currencies,
foreign currency units or composite currencies.
(4) Subject to note (3) above, there is being registered an indeterminate
principal amount of Debt Securities and an indeterminate number of
shares of Preferred Stock and Common Stock as from time to time may be
sold or issued at indeterminate prices. Includes Debt Securities,
Preferred Stock that may be purchased by underwriters to cover
allotments, if any.
(5) In addition to any Debt Securities, Preferred Stock or Common Stock
that may be issued directly under this registration statement, there
are being registered hereunder an indeterminate amount of Debt
Securities, and an indeterminate number of shares of Preferred Stock
and Common Stock as may be issued upon conversion or exchange of
Preferred Stock or Debt Securities. No separate consideration will be
received for any Debt Securities, Preferred Stock or Common Stock so
issued upon such conversion or exchange.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH
DATE OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION B(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 B(A), MAY DETERMINE.
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PROSPECTUS
DORAL FINANCIAL CORPORATION
(DORAL FINANCIAL LOGO)
MAY OFFER
$250,000,000
Debt Securities
Preferred Stock
Common Stock
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Doral Financial will provide the specific terms of these securities in
supplements to this prospectus. You should read this prospectus and the
accompanying prospectus supplement carefully before you invest.
INVESTING IN THESE SECURITIES INVOLVES RISKS. SEE "RISK FACTORS" BEGINNING
ON PAGE 6 OF THIS PROSPECTUS.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE OR
COMMONWEALTH OF PUERTO RICO SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF
THESE SECURITIES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS OR
ANY ACCOMPANYING PROSPECTUS SUPPLEMENT. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THESE SECURITIES ARE NOT DEPOSITS OR SAVINGS ACCOUNTS AND ARE NOT INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OR
INSTRUMENTALITY.
This prospectus is dated December , 2000
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TABLE OF CONTENTS
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SUMMARY.................................... 3
RISK FACTORS............................... 6
Fluctuations in Interest Rates May Hurt
Doral Financial's Business............. 6
Doral Financial May Suffer Losses From
Mortgage Loans It Sells But Retains the
Credit Risk............................ 7
Increases in Doral Financial's
Originations of Commercial Loans Has
Increased Its Credit Risks............. 7
Doral Financial Is Exposed To Greater
Risk Because Its Business Is
Concentrated In Puerto Rico............ 7
DORAL FINANCIAL............................ 7
USE OF PROCEEDS............................ 8
DESCRIPTION OF DEBT SECURITIES............. 8
General.................................. 9
Denominations............................ 10
Subordination............................ 10
Limitations on Liens and Disposition of
Stock of Principal Mortgage Banking
Subsidiaries........................... 11
Consolidation, Merger or Sale............ 13
Modification of Indentures............... 13
Events of Default........................ 13
Covenants................................ 15
Payment and Transfer..................... 15
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Global Securities........................ 15
Defeasance............................... 15
The Trustee.............................. 16
DESCRIPTION OF PREFERRED STOCK............. 16
General.................................. 17
Rank..................................... 17
Dividends................................ 17
Conversion or Exchange................... 18
Redemption............................... 19
Liquidation Preference................... 19
Voting rights............................ 19
DESCRIPTION OF CAPITAL STOCK............... 20
Authorized Capital....................... 20
Common Stock............................. 20
Preferred Stock.......................... 21
PLAN OF DISTRIBUTION....................... 22
By Agents................................ 22
By Underwriters.......................... 23
Participation of Doral Securities........ 23
Direct Sales............................. 23
General Information...................... 23
WHERE YOU CAN FIND MORE
INFORMATION................................ 24
LEGAL OPINIONS............................. 25
EXPERTS.................................... 25
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SUMMARY
This summary provides a brief overview of the key aspects of Doral
Financial and the most significant terms of the offered securities. For a more
complete understanding of the terms of the offered securities, before making
your investment decision, you should carefully read:
- this prospectus, which explains the general terms of the securities that
Doral Financial may offer;
- the accompanying prospectus supplement, which (1) explains the specific
terms of the securities being offered and (2) updates and changes
information in this prospectus; and
- the documents referred to in "Where You Can Find More Information" on page
24 for information on Doral Financial, including its financial statements.
DORAL FINANCIAL
Doral Financial is a bank holding company engaged in the mortgage banking,
banking and securities businesses.
Doral Financial's principal executive offices are located at 1159 Franklin
D. Roosevelt Avenue, San Juan, Puerto Rico, and its telephone number is (787)
749-7100.
THE SECURITIES DORAL
FINANCIAL MAY OFFER
Doral Financial may use this prospectus to offer up to $250,000,000 of:
- debt securities;
- preferred stock; and
- common stock
A prospectus supplement will describe the specific types, amounts, prices, and
detailed terms of any of these offered securities.
DEBT SECURITIES
The debt securities are unsecured general obligations of Doral Financial in
the form of senior or subordinated debt. The senior debt will have the same rank
as all of Doral Financial's other unsecured and unsubordinated debt. The
subordinated debt will be subordinated to all Senior Indebtedness and Other
Financial Obligations, as these terms are defined below under "Description of
Debt Securities -- Subordination."
The senior and subordinated debt will be issued under separate indentures
between Doral Financial and Bankers Trust Company, as trustee. Below are
summaries of the general features of the debt securities from these indentures.
For a more detailed description of these features, see "Description of Debt
Securities" below. You are also encouraged to read the indentures, which are
filed as exhibits to the registration statement of which this prospectus is a
part. You can receive copies of these documents by following the directions on
page 24.
GENERAL INDENTURE PROVISIONS
THAT APPLY TO SENIOR AND
SUBORDINATED DEBT SECURITIES
- The indentures do not limit the amount of debt that Doral Financial may
issue or provide holders any protection should there be a highly
leveraged transaction, recapitalization or restructuring involving Doral
Financial. However, the senior debt indenture does limit Doral
Financial's ability to sell, transfer or pledge the stock of any mortgage
banking subsidiary that meets the financial thresholds in the indenture.
These thresholds are described below under "Description of Debt
Securities."
- Each indenture allows for different types of debt securities, including
indexed securities, to be issued in series.
- The indentures allow Doral Financial to merge or to consolidate with
another company, or sell all or substantially all of its assets to
another company. If any of these events occur, the other company
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would be required to assume Doral Financial's responsibilities for the
debt securities. Unless the transaction results in an event of default,
Doral Financial will be released from all liabilities and obligations
under the debt securities when the successor company assumes Doral
Financial's responsibilities.
- The indentures provide that holders of a majority of the principal amount
of the senior debt securities and holders of a majority of the total
principal amount of the subordinated debt securities outstanding in any
series may vote to change Doral Financial's obligations or your rights
concerning those securities. However, some changes to the financial terms
of a security, including changes in the payment of principal or interest
on that security or the currency of payment, cannot be made unless every
holder of that security consents to the change.
- Doral Financial may satisfy its obligations under the senior debt
securities or be released from its obligation to comply with the
limitations discussed above at any time by depositing sufficient amounts
of cash or U.S. government securities with the trustee to pay Doral
Financial's obligations under the particular senior debt securities when
due.
- The indentures govern the actions of the trustee with regard to the debt
securities, including when the trustee is required to give notices to
holders of the securities and when lost or stolen debt securities may be
replaced.
EVENTS OF DEFAULT THAT
APPLY TO SENIOR DEBT
The events of default specified in the senior debt indenture include:
- failure to pay required interest for 30 days;
- failure to pay principal when due;
- failure to make a required sinking fund payment when due;
- failure to perform other covenants for 90 days after notice;
- acceleration of the senior debt securities of any other series or any
indebtedness for borrowed money of Doral Financial and certain
subsidiaries, in each case exceeding $5,000,000 in an aggregate principal
amount; and
- certain events of insolvency, bankruptcy or reorganization involving Doral
Financial and certain subsidiaries, whether voluntary or not.
EVENTS OF DEFAULT THAT
APPLY TO SUBORDINATED DEBT
The only events of default specified in the subordinated debt indenture are
certain events of insolvency, bankruptcy or reorganization involving Doral
Financial.
REMEDIES
If there were an event of default, the trustee or holders of 25% of the
principal amount of debt securities outstanding in a series could demand that
the principal be paid immediately. However, holders of a majority in principal
amount of the securities in that series could rescind that acceleration of the
debt securities.
The subordinated debt indenture does not provide for any right of
acceleration of the payment of principal of a series of subordinated debt
securities upon a default in the payment of principal or interest or in the
performance of any covenant or agreement in the subordinated debt securities or
in the subordinated debt indenture. However, in the event of a default in the
payment of principal or interest, the holder of any debt security shall have the
right to institute a suit for the collection of such overdue payment.
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PREFERRED STOCK
Doral Financial may issue preferred stock with various terms to be
established by its board of directors or a committee designated by the board.
Each series of preferred stock will be more fully described in the particular
prospectus supplement that will accompany this prospectus, including redemption
provisions, rights in the event of liquidation, dissolution or winding up of
Doral Financial, voting rights and conversion rights.
Generally, each series of preferred stock will rank on an equal basis with
each other series of preferred stock and will rank prior to Doral Financial's
common stock. The prospectus supplement will also describe how and when
dividends will be paid on the series of preferred stock.
COMMON STOCK
Common stockholders are entitled to receive dividends declared by the Board
of Directors subject to the rights of preferred stockholders. Each holder of
Common Stock is entitled to one vote per share. The holders of common stock have
no preemptive rights or cumulative voting rights.
Doral Financial's common stock is currently traded on the Nasdaq National
Market System under the symbol "Dorl".
RATIO OF EARNINGS TO FIXED
CHARGES AND RATIO OF EARNINGS
TO COMBINED FIXED CHARGES AND
PREFERRED STOCK DIVIDENDS
The following table shows (1) the ratio of earnings to fixed charges and
(2) the ratio of earnings to combined fixed charges and preferred stock
dividends of Doral Financial for each of the five most recent fiscal years and
for the nine months ended September 30, 2000. The ratio of earnings to fixed
charges is a measure of Doral Financial's ability to generate earnings to pay
the fixed expenses of its debt. The ratio of earnings to combined fixed charges
and preferred stock dividends is a measure of Doral Financial's ability to
generate earnings to pay the fixed expenses of its debt and dividends on its
preferred stock.
These computations include Doral Financial and its subsidiaries. For
purposes of computing these ratios, earnings consist of pre-tax income from
continuing operations plus fixed charges and amortization of capitalized
interest, less interest capitalized. Fixed charges consist of interest expensed
and capitalized, amortization of debt issuance costs, and Doral Financial's
estimate of the interest component of rental expense. Ratios are presented both
including and excluding interest on deposits. The term "preferred stock
dividends" is the amount of pre-tax earnings that is required to pay dividends
on Doral Financial's outstanding preferred stock.
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NINE MONTHS
ENDED
SEPTEMBER 30, YEAR ENDED DEC. 31,
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2000 1999 1998 1997 1996 1995
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Ratio of Earnings to Combined Fixed Charges
Including Interest on Deposits............................ 1.32x 1.46x 1.51x 1.61x 1.66x 1.50x
Excluding Interest on Deposits............................ 1.40x 1.59x 1.61x 1.72x 1.75x 1.54x
Ratio of Earnings to Combined Fixed Charges and Preferred
Stock Dividends
Including Interest on Deposits............................ 1.29x 1.41x 1.50x 1.60x 1.66x 1.49x
Excluding Interest on Deposits............................ 1.36x 1.52x 1.59x 1.72x 1.75x 1.53x
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RISK FACTORS
You should carefully consider the following factors and other information
in this prospectus, including the information incorporated by reference in this
prospectus, before deciding to invest in any of the offered securities.
FLUCTUATIONS IN INTEREST RATES MAY HURT DORAL FINANCIAL'S BUSINESS
Interest rate fluctuations is the primary market risk affecting Doral
Financial. Changes in interest rates affect the following areas of its business:
- the number of mortgage loans originated and purchased;
- the interest income earned on loans and securities;
- gain on sale of loans;
- the value of securities holdings; and
- the value of its servicing asset.
Increases in Interest Rates Reduce Demand for Mortgage Loans. Higher
interest rates increase the cost of mortgage loans to consumers and reduce
demand for mortgage loans, which hurts Doral Financial's profits. Reduced demand
for mortgage loans results in reduced loan originations by Doral Financial and
lower mortgage origination income. Demand for refinance loans is particularly
sensitive to increases in interest rates. Doral Financial has for many years
relied on refinance loans for a large portion of its mortgage loan production.
Increases in Interest Rates Reduce Net Interest Income. Increases in
short-term interest rates reduce net interest income, which is an important part
of Doral Financial's earnings. Net interest income is the difference between the
interest received by Doral Financial on its assets and the interest paid on its
borrowings. Most of Doral Financial's assets, like its mortgage loans and
mortgage-backed securities are long-term assets with fixed interest rates. In
contrast, most of Doral Financial's borrowings are short-term. When interest
rates rise, Doral Financial must pay more in interest while interest earned on
its assets does not rise as quickly. This causes profits to decrease.
Increases in Interest Rates May Reduce or Eliminate Gain on Sale of
Mortgage Loans. If long-term interest rates increase between the time Doral
Financial commits to or establishes an interest rate on a mortgage loan and the
time it sells the loan, Doral Financial may realize a reduced gain or a loss on
such sale.
Increases in Interest Rates May Reduce the Value of Mortgage Loans and
Securities' Holdings. Increases in interest rates may reduce the value of Doral
Financial's financial assets and have an adverse impact on its earnings and
financial condition. Doral Financial owns a substantial portfolio of mortgage
loans, mortgage-backed securities and other debt securities with fixed interest
rates. The market value of an obligation with a fixed interest rate generally
decreases when prevailing interest rates rise.
Decreases in Interest Rates May Adversely Affect Value of Servicing
Asset. Decreases in interest rates lead to increases in the prepayment of
mortgages by borrowers, which may reduce the value of Doral Financial's
servicing asset. The servicing asset is the estimated present value of the fees
Doral Financial expects to receive on the mortgages it services over their
expected term. Doral Financial assigns this value based on what other persons
have paid for similar servicing rights in recent transactions. If prepayments
increase above expected levels, the value of the servicing asset decreases
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because the amount of future fees expected to be received by Doral Financial
decreases. Doral Financial may be required to recognize this decrease in value
by taking a charge against its earnings, which causes its profits to decrease.
DORAL FINANCIAL MAY SUFFER LOSSES FROM MORTGAGE LOANS IT SELLS BUT RETAINS THE
CREDIT RISK
Doral Financial often retains all or part of the credit risk on sales of
mortgage loans that do not qualify for the sale or exchange programs of GNMA,
FNMA or FHLMC and may suffer losses on these loans. Doral Financial suffers
losses on these arrangements when foreclosure sale proceeds of the property
underlying a defaulted mortgage loan are less than the outstanding principal
balance of these loans and the costs of holding and disposing of the related
property.
INCREASES IN DORAL FINANCIAL'S ORIGINATIONS OF COMMERCIAL LOANS HAS INCREASED
ITS CREDIT RISKS
Doral Financial's recent increase in originations of mortgage loans secured
by income producing residential buildings and commercial properties has
increased its credit risks. These loans involve greater credit risks than
residential mortgage loans because they are larger in size and more risk is
concentrated in a single borrower. The properties securing these loans are also
harder to dispose of in foreclosure.
DORAL FINANCIAL IS EXPOSED TO GREATER RISK BECAUSE ITS BUSINESS IS CONCENTRATED
IN PUERTO RICO
Because most of Doral Financial's mortgage loans are secured by properties
located in Puerto Rico, Doral Financial is exposed to a greater risk of
delinquency or default on these mortgage loans resulting from adverse economic,
political or business developments and natural hazard risks, such as hurricanes,
that affect Puerto Rico. If Puerto Rico's real estate market experiences an
overall decline in property values, the rates of foreclosure loss on the
mortgage loans would probably increase substantially. This would cause Doral
Financial's profitability to decrease.
DORAL FINANCIAL
Doral Financial Corporation is a bank holding company organized under the
laws of the Commonwealth of Puerto Rico. Its main lines of business are
described below.
- Mortgage banking -- Doral Financial is the leading mortgage banking
institution in Puerto Rico based on the volume of origination of first
mortgage loans secured by single family residences and the size of its
mortgage servicing portfolio. Doral Financial conducts this business
in Puerto Rico primarily through a division of Doral Financial, HF
Mortgage Bankers, and its subsidiaries, Doral Mortgage Corporation,
Centro Hipotecario, Inc., and Sana Investment Mortgage Bankers, Inc.
Doral Financial also conducts mortgage banking activities in the
mainland United States through Doral Mortgage and its indirect
subsidiary, Doral Money, Inc.
- Banking services -- Doral Financial conducts this business in Puerto
Rico through its commercial banking subsidiary, Doral Bank, and in the
New York City metropolitan area through its federal savings bank
subsidiary, Doral Bank, F.S.B.
- Securities services -- Doral Financial conducts this business in
Puerto Rico through its broker-dealer subsidiary, Doral Securities,
Inc.
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Because Doral Financial is a holding company, the claims of creditors and
any preferred stockholders of Doral Financial's subsidiaries will have a
priority over Doral Financial's equity rights and the rights of Doral
Financial's creditors, including the holders of debt securities, and preferred
stockholders to participate in the assets of the subsidiary upon the
subsidiary's liquidation.
Doral Financial's subsidiaries that operate in the banking and securities
business can only pay dividends if they are in compliance with the applicable
regulatory requirements of federal and state bank regulatory authorities and
securities regulators. Doral Financial must also maintain the required capital
levels of a bank holding company before it may pay dividends on its stock.
There are various statutory and regulatory limitations on the extent to
which Doral Bank, Doral Bank, FSB or any other banking subsidiary (including a
federal savings association) can finance or otherwise transfer funds to Doral
Financial or its nonbanking subsidiaries, either in the form of loans,
extensions of credit, investments or asset purchases.
- Such transfers by any banking subsidiary to Doral Financial or any
nonbanking subsidiary are limited to 10% of the banking subsidiary's
capital and surplus, and with respect to Doral Financial and all such
nonbanking subsidiaries, to an aggregate of 20% of the banking
subsidiary's capital and surplus.
- Furthermore, loans and extensions of credit are required to be secured
in specified amounts and are required to be on terms and conditions
consistent with safe and sound banking practices.
In addition, there are regulatory limitations on the payment of dividends
directly or indirectly to Doral Financial. Federal and Puerto Rico authorities
also have the right to further limit the payment of dividends by banking
subsidiaries.
Under the policy of the Board of Governors of the Federal Reserve System, a
bank holding company is required to act as a source of strength to its
subsidiary banks and to commit resources to support such banks. As a result of
that policy, Doral Financial may be required to commit resources to Doral Bank,
Doral Bank, FSB or any other banking subsidiary created in the future in
circumstances in which it might not do so absent such policy. Further, federal
bankruptcy law provides that in the event of the bankruptcy of Doral Financial,
any commitment by Doral Financial to regulators to maintain the capital of a
banking subsidiary will be assumed by the bankruptcy trustee and entitled to
priority of payment.
USE OF PROCEEDS
Unless otherwise specified in the applicable prospectus supplement, Doral
Financial will use the net proceeds from the sale of the offered securities for
general corporate purposes, including (1) funding its mortgage banking
activities, (2) making capital contributions or extensions of credit to its
existing and future banking and non-banking subsidiaries, (3) funding possible
acquisitions of mortgage banking and other financial institutions, including
those engaged in the insurance business and (4) repayment of outstanding
borrowings. Doral Financial does not at present have any plans to use the
proceeds from any offering for an acquisition.
DESCRIPTION OF DEBT SECURITIES
The debt securities will be direct unsecured general obligations of Doral
Financial and will be either senior or subordinated debt. The debt securities
will be issued under separate indentures
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between Doral Financial and Bankers Trust Company. Senior debt securities will
be issued under a senior debt indenture and subordinated debt securities will be
issued under a subordinated debt indenture. The senior debt indenture and the
subordinated debt indenture are sometimes referred to in this prospectus
individually as an "indenture" and collectively as the "indentures." The forms
of the indentures have been filed with the SEC as exhibits to the registration
statement of which this prospectus forms a part.
The following briefly summarizes the material provisions of the indentures
and the debt securities, other than pricing and related terms disclosed in the
accompanying prospectus supplement. The summary is not complete. You should read
the more detailed provisions of the applicable indenture for provisions that may
be important to you. So that you can easily locate these provisions, the numbers
in parenthesis below refer to sections in the applicable indenture or, if no
indenture is specified, to sections in each of the indentures. Whenever
particular sections or defined terms of the applicable indenture are referred
to, such sections or defined terms are incorporated into this prospectus by
reference, and the statement in this prospectus is qualified by that reference.
GENERAL
The senior debt securities will be unsecured and rank equally with all of
Doral Financial's other senior and unsubordinated debt. The subordinated debt
securities will be unsecured and will be subordinated to all of Doral
Financial's Senior Indebtedness (as defined below under "-- Subordination"). In
certain events of insolvency, the subordinated debt securities will also be
subordinated to all of Doral Financial's Other Financial Obligations (as defined
below under "-- Subordination"). As of September 30, 2000, Doral Financial had
approximately $2.1 billion of Senior Indebtedness and Other Obligations
outstanding.
A prospectus supplement relating to any series of debt securities being
offered will include specific terms relating to the offering. These terms will
include some or all of the following:
- The title of the debt securities and whether the debt securities will be
senior or subordinated debt;
- The total principal amount of the debt securities;
- The percentage of the principal amount at which the debt securities will
be issued and any payments due if the maturity of the debt securities is
accelerated;
- The dates on which the principal of the debt securities will be payable;
- The interest rate which the debt securities will bear, or the method for
determining the rate, and the interest payment dates for the debt
securities;
- Any mandatory or optional redemption provisions;
- Any sinking fund or other provisions that would obligate Doral Financial
to repurchase or otherwise redeem the debt securities;
- Any provisions granting special rights to holders when a specified event
occurs;
- Any changes to or additional events of defaults or covenants;
- Any special tax implications of the debt securities, including provisions
for original issue discount securities, if offered; and
- Any other terms of the debt securities.
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The indentures do not limit the amount of debt securities that may be
issued. Each indenture allows debt securities to be issued up to the principal
amount that may be authorized by Doral Financial and may be in any currency or
currency unit designated by Doral Financial. (Sections 3.01 and 3.03.)
The terms on which a series of debt securities may be converted into or
exchanged for common stock or other securities of Doral Financial will be set
forth in the prospectus supplement relating to each series. Such terms will
include provisions as to whether conversion or exchange is mandatory, at the
option of the holder or at the option of Doral Financial. The terms may include
provisions pursuant to which the number of shares of common stock or other
securities of Doral Financial to be received by the holders of such series of
debt securities may be adjusted.
DENOMINATIONS
Unless otherwise provided in the accompanying prospectus supplement, debt
securities will be issued in registered form in denominations of $1,000 each and
any multiples thereof. (Section 3.02.)
SUBORDINATION
Under the subordinated indenture, payment of the principal, interest and
any premium on the subordinated debt securities will generally be subordinated
and junior in right of payment to the prior payment in full of all Senior
Indebtedness (as defined below). The subordinated indenture provides that no
payment of principal, interest or any premium on the subordinated debt
securities may be made unless Doral Financial pays in full the principal,
interest, any premium or any other amounts on any Senior Indebtedness then due.
Also, no payment of principal, interest or any premium on the subordinated debt
securities may be made if there shall have occurred and be continuing an event
of default with respect to any Senior Indebtedness permitting the holders
thereof to accelerate the maturity thereof, or if any judicial proceeding shall
be pending with respect to any such default.
If there is any insolvency, bankruptcy, liquidation or other similar
proceeding relating to Doral Financial, then all Senior Indebtedness must be
paid in full before any payment may be made to any holders of subordinated debt
securities. If after payment of the Senior Indebtedness there remains any
amounts available for distribution and any person entitled to payment pursuant
to the terms of Other Financial Obligations has not been paid in full all
amounts due or to become due on the Other Financial Obligations, then these
remaining amounts shall first be used to pay in full the Other Financial
Obligations before any payment may be made to the holders of subordinated debt
securities. Holders of subordinated debt securities must deliver any payments
received by them to the holders of Senior Indebtedness and Other Financial
Obligations until all Senior Indebtedness and Other Financial Obligations are
paid in full. (Subordinated debt indenture, Section 16.02.)
The Subordinated Indenture will not limit the amount of Senior Indebtedness
and Other Financial Obligations that Doral Financial may incur.
"Senior Indebtedness" means any of the following, whether incurred before
or after the execution of the subordinated debt indenture:
(1) all obligations of Doral Financial for the repayment of borrowed money,
(2) all obligations of Doral Financial for the deferred purchase price of
property, but excluding trade accounts payable in the ordinary course
of business,
(3) all capital lease obligations of Doral Financial, and
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<PAGE> 12
(4) all obligations of the type referred to in clauses (1) through (3) of
other persons that Doral Financial has guaranteed or that is otherwise
its legal liability;
but Senior Indebtedness does not include:
(a) the subordinated debt securities; and
(b) indebtedness that by its terms is subordinated to, or ranks on an
equal basis with, the subordinated debt securities.
"Other Financial Obligations" means all obligations of Doral Financial to
make payment pursuant to the terms of financial instruments, such as:
(1) securities contracts and foreign currency exchange contracts,
(2) derivative instruments, like swap agreements, cap agreements, floor
agreements, collar agreements, interest rate agreements, foreign
exchange agreements, options, commodity futures contracts, and
commodity option contracts, and
(3) similar financial instruments;
but Other Financial Obligations does not include:
(a) Senior Indebtedness, and
(b) indebtedness that by its terms is subordinated to, or ranks on an
equal basis with, the subordinated debt securities.
LIMITATIONS ON LIENS AND DISPOSITION OF STOCK OF PRINCIPAL MORTGAGE BANKING
SUBSIDIARIES
The senior debt indenture provides that Doral Financial will not, and will
not permit any Subsidiary to, incur, issue, assume or guarantee any indebtedness
for money borrowed if such indebtedness is secured by a pledge of, lien on, or
security interest in any shares of Voting Stock of any Principal Mortgage
Banking Subsidiary, without providing that each series of senior debt securities
and, at Doral Financial's option, any other senior indebtedness ranking equally
with the senior debt securities, shall be secured equally and ratably with such
indebtedness. This limitation shall not apply to indebtedness secured by a
pledge of, lien on or security interest in any shares of Voting Stock of any
corporation at the time it becomes a Principal Mortgage Banking Subsidiary.
(Senior debt indenture, Section 12.06.)
The senior debt indenture also provides that Doral Financial will not sell,
assign, transfer or otherwise dispose of any shares of, securities convertible
into or options, warrants or rights to subscribe for or purchase shares of,
Voting Stock (other than directors' qualifying shares) of any Principal Mortgage
Banking Subsidiary and will not permit any Principal Mortgage Banking Subsidiary
to issue (except to Doral Financial) any shares of, securities convertible into
or options, warrants or rights to subscribe for or purchase shares of, Voting
Stock of any Principal Mortgage Banking Subsidiary, except for sales,
assignments, transfers or other dispositions that:
are for fair market value on the date thereof, as determined by the
Board of Directors of Doral Financial (which determination shall be
conclusive) and, after giving effect to such disposition and to any
possible dilution, Doral Financial will own not less than 80% of the
shares of Voting Stock of such Principal Mortgage Banking Subsidiary
then issued and outstanding free and clear of any security interest;
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<PAGE> 13
are made in compliance with an order of a court or regulatory authority
of competent jurisdiction, as a condition imposed by any such court or
authority permitting the acquisition by Doral Financial, directly or
indirectly, of any other mortgage banking institution or entity the
activities of which are legally permissible for a bank holding company
or a subsidiary thereof to engage in, or as an undertaking made to such
authority in connection with such an acquisition;
are made where such Principal Mortgage Banking Subsidiary, having
obtained any necessary regulatory approvals, unconditionally guarantees
payment when due of the principal of and premium, if any, and interest
on the debt securities; or
are made to Doral Financial or any wholly-owned subsidiary if such
wholly-owned subsidiary agrees to be bound by this covenant and Doral
Financial agrees to maintain such wholly-owned subsidiary as a
wholly-owned subsidiary.
Notwithstanding the foregoing, any Principal Mortgage Banking Subsidiary
may be merged into or consolidated with another mortgage banking institution
organized if, after giving effect to such merger or consolidation, Doral
Financial or any wholly-owned subsidiary owns at least 80% of the Voting Stock
of such other mortgage banking institution then issued and outstanding free and
clear of any security interest and if, immediately after giving effect thereto
and treating any such resulting institution thereafter as a Principal Mortgage
Banking Subsidiary and as a Subsidiary for purposes of the senior debt
indenture, no event of default, and no event that, after the giving of notice or
lapse of time or both, would become an event of default under the senior debt
indenture, has occurred and is continuing.
The subordinated debt indenture does not contain any of the foregoing
limitations on the creation of liens or disposition of Principal Mortgage
Banking Subsidiaries and these limitations are not for the benefit of any series
of subordinated debt securities.
"Principal Mortgage Banking Subsidiary" means a Subsidiary, including its
Subsidiaries, that is principally engaged in the mortgage banking business and
meets any of the following conditions:
- Doral Financial's and its other Subsidiaries' investments in and advances
to the Subsidiary exceed 30 percent of the total assets of Doral
Financial and its Subsidiaries consolidated as of the end of the most
recently completed fiscal year;
- Doral Financial's and its other Subsidiaries' proportionate share of the
total assets of the Subsidiary after intercompany eliminations exceeds 30
percent of the total assets of Doral Financial and its Subsidiaries
consolidated as of the end of the most recently completed fiscal year; or
- Doral Financial's and its other Subsidiaries' equity in the income from
continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principles of the Subsidiary
exceeds 30 percent of such income of Doral Financial and its Subsidiaries
consolidated for the most recently completed fiscal year.
"Principal Mortgage Banking Subsidiary" does not include, however, any
Subsidiary that is a bank or savings association unless Doral Financial
transfers to such bank or savings association the mortgage banking business
conducted by Doral Mortgage Corporation or Doral Financial's HF Mortgage Bankers
Division as of the date of this prospectus.
"Subsidiary" means any corporation of which securities entitled to elect at
least a majority of the corporation's directors shall at the time be owned,
directly or indirectly, by Doral Financial, and/or one or more Subsidiaries.
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<PAGE> 14
"Voting Stock" means capital stock the holders of which have general voting
power under ordinary circumstances to elect at least a majority of the board of
directors of a corporation, except capital stock that carries only the right to
vote conditioned on the happening of an event regardless of whether such event
shall have happened. (Senior debt indenture, Sections 1.01, 12.06 and 12.07.)
CONSOLIDATION, MERGER OR SALE
Each indenture generally permits a consolidation or merger between Doral
Financial and another corporation. They also permit Doral Financial to sell all
or substantially all of its property and assets. If this happens, the remaining
or acquiring corporation shall assume all of Doral Financial's responsibilities
and liabilities under the indentures including the payment of all amounts due on
the debt securities and performance of the covenants in the indentures.
However, Doral Financial will only consolidate or merge with or into any
other corporation or sell all or substantially all of its assets according to
the terms and conditions of the indentures. The remaining or acquiring
corporation will be substituted for Doral Financial in the indentures with the
same effect as if it had been an original party to the indenture. Thereafter,
the successor corporation may exercise Doral Financial's rights and powers under
any indenture, in Doral Financial's name or in its own name. Any act or
proceeding required or permitted to be done by Doral Financial's board of
directors or any of its officers may be done by the board or officers of the
successor corporation. If Doral Financial merges with or into any other
corporation or sells all or substantially all of its assets, it shall be
released from all liabilities and obligations under the indentures and under the
debt securities. (Sections 10.01 and 10.02.)
MODIFICATION OF INDENTURES
Under each indenture, Doral Financial's rights and obligations and the
rights of the holders may be modified with the consent of the holders of a
majority in aggregate principal amount of the outstanding Debt Securities of
each series affected by the modification. No modification of the principal or
interest payment terms, and no modification reducing the percentage required for
modifications, is effective against any holder without its consent. (Sections
11.01 and 11.02.)
EVENTS OF DEFAULT
The senior debt indenture provides that an "event of default" regarding any
series of senior debt securities will be any of the following:
- failure to pay interest on any debt security of such series for 30 days;
- failure to pay the principal or any premium on any debt security of such
series when due;
- failure to deposit any sinking fund payment when due by the terms of a
debt security of such series;
- failure to perform any other covenant in the indenture that continues for
90 days after being given written notice;
- acceleration of the senior debt securities of any other series or any
other indebtedness for borrowed money of Doral Financial or any
Significant Subsidiary (as defined below), in each case exceeding
$5,000,000 in an aggregate principal amount;
- certain events involving bankruptcy, insolvency or reorganization of
Doral Financial or any Significant Subsidiary; or
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<PAGE> 15
- any other event of default included in any indenture or supplemental
indenture. (Section 5.01.)
"Significant Subsidiary" means a Subsidiary, including its Subsidiaries,
that meets any of the following conditions:
- Doral Financial's and its other Subsidiaries' investments in and advances
to the Subsidiary exceed 10 percent of the total assets of Doral
Financial and its Subsidiaries consolidated as of the end of the most
recently completed fiscal year;
- Doral Financial's and its other Subsidiaries' proportionate share of the
total assets of the Subsidiary after intercompany eliminations exceeds 10
percent of the total assets of Doral Financial and its Subsidiaries
consolidated as of the end of the most recently completed fiscal year; or
- Doral Financial's and its other Subsidiaries' equity in the income from
continuing operations before income taxes, extraordinary items and
cumulative effect of a change in accounting principles of the Subsidiary
exceeds 10 percent of such income of Doral Financial and its Subsidiaries
consolidated for the most recently completed fiscal year.
The subordinated debt indenture provides that an "event of default"
regarding any series of subordinated debt securities will occur only upon
certain events involving bankruptcy, insolvency or reorganization of Doral
Financial. A default in the payment of principal or interest or in the
performance of any covenant or agreement in the subordinated debt securities of
any series or in the subordinated indenture is not an event of default under the
subordinated debt indenture and does not provide for any right of acceleration
of the payment of principal of a series of subordinated debt securities.
However, in the event of a default in the payment of principal or interest, the
holder of any debt security shall have the right to institute a suit for the
collection of such overdue payment.
An event of default for a particular series of debt securities does not
necessarily constitute an event of default for any other series of debt
securities issued under an indenture. The Trustee may withhold notice to the
holders of Debt Securities of any default (except in the payment of principal or
interest) if it considers such withholding of notice to be in the best interests
of the holders. (Section 6.02.)
If an event of default for any series of debt securities occurs and
continues, the trustee or the holders of at least 25% in aggregate principal
amount of the debt securities of the series may declare the entire principal of
all the debt securities of that series to be due and payable immediately. If
this happens, subject to certain conditions, the holders of a majority of the
aggregate principal amount of the debt securities of that series can void the
declaration. (Section 5.02.)
Other than its duties in case of a default, a trustee is not obligated to
exercise any of its rights or powers under any Indenture at the request, order
or direction of any holders, unless the holders offer the trustee reasonable
indemnity. (Section 6.01.) If they provide this reasonable indemnification, the
holders of a majority in principal amount of any series of debt securities may
direct the time, method and place of conducting any proceeding or any remedy
available to the trustee, or exercising any power conferred upon the trustee,
for any series of debt securities. (Section 5.12.)
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<PAGE> 16
COVENANTS
Under the indentures, Doral Financial will agree to:
- pay the principal, interest and any premium on the debt securities
when due;
- maintain a place of payment;
- deliver a report to the trustee at the end of each fiscal year
certifying as to the absence of events of default and to Doral
Financial's compliance with the terms of the indentures; and
- deposit sufficient funds with any paying agent on or before the due
date for any principal, interest or any premium.
PAYMENT AND TRANSFER
Principal, interest and any premium on fully registered securities will be
paid at designated places. Payment will be made by check mailed to the persons
in whose names the debt securities are registered on days specified in the
indentures or any prospectus supplement. Debt securities payments in other forms
will be paid at a place designated by Doral Financial and specified in a
prospectus supplement. (Section 3.07.)
Fully registered securities may be transferred or exchanged at the
corporate trust office of the Trustee or at any other office or agency
maintained by Doral Financial for such purposes, without the payment of any
service charge except for any tax or governmental charge. (Section 3.05.)
GLOBAL SECURITIES
The debt securities of a series may be issued in whole or in part in the
form of one or more global certificates that will be deposited with a depositary
identified in a prospectus supplement. Unless it is exchanged in whole or in
part for debt securities in definitive form, a global certificate may generally
be transferred only as a whole unless it is being transferred to certain
nominees of the depositary. (Section 2.03.)
Unless otherwise stated in any prospectus supplement, The Depository Trust
Company, New York, New York ("DTC") will act as depositary. Beneficial interests
in global certificates will be shown on, and transfers of global certificates
will be effected only through records maintained by DTC and its participants.
DEFEASANCE
Doral Financial will be discharged from its obligations on the senior debt
securities of any series at any time if it deposits with the trustee sufficient
cash or government securities to pay the principal, interest, any premium and
any other sums due to the stated maturity date or a redemption date of the
senior debt securities of the series. Doral Financial must also deliver to the
trustee an opinion of counsel to the effect that the holders of the senior debt
securities of that series will have no federal income tax consequences as a
result of such deposit. If this happens, the holders of the senior debt
securities of the series will not be entitled to the benefits of the senior debt
indenture except for registration of transfer and exchange of senior debt
securities and replacement of lost, stolen or mutilated senior debt securities.
(Senior debt indenture, Section 15.02.)
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<PAGE> 17
The subordinated debt indenture does not contain provisions for the
defeasance and discharge of Doral Financial's obligations on the subordinated
debt securities and the subordinated indenture.
THE TRUSTEE
Bankers Trust Company will be the trustee under the indentures. It is also
trustee under another indenture with Doral Financial pursuant to which Doral
Financial's 7.84% Senior Notes due 2006 were issued. In addition, it is the
administrative and syndicate agent and a lender under syndicated credit
agreements which provide for credit facilities to Doral Financial. The trustee
and its affiliates may have other relations with Doral Financial in the ordinary
course of business.
The occurrence of any default under either the senior debt indenture or the
indenture relating to the 7.84% Senior Notes and the subordinated debt indenture
could create a conflicting interest for the trustee under the Trust Indenture
Act. If such default has not been cured or waived within 90 days after the
trustee has or acquired a conflicting interest, the trustee would generally be
required by the Trust Indenture Act to eliminate such conflicting interest or
resign as trustee with respect to both the 7.84% Senior Notes and the debt
securities issued under the senior indenture or with respect to the subordinated
debt securities issued under the subordinated indenture. In the event of the
trustee's resignation, Doral Financial shall promptly appoint a successor
trustee with respect to the affected securities.
The Trust Indenture Act also imposes certain limitations on the right of
the trustee, as a creditor of Doral Financial, to obtain payment of claims in
certain cases, or to realize on certain property received in respect to any such
claim or otherwise. The trustee will be permitted to engage in other
transactions with Doral Financial, provided that if it acquires a conflicting
interest within the meaning of Section 310 of the Trust Indenture Act, it must
generally either eliminate such conflict or resign.
DESCRIPTION OF PREFERRED STOCK
The following briefly summarizes the material terms of Doral Financial's
preferred stock, other than pricing and related terms which will be disclosed in
a prospectus supplement. You should read the particular terms of any series of
preferred stock offered by Doral Financial which will be described in more
detail in any prospectus supplement relating to such series, together with the
more detailed provisions of Doral Financial's restated certificate of
incorporation and the certificate of designation relating to each particular
series of preferred stock for provisions that may be important to you. The
restated certificate of incorporation is filed as an exhibit to the registration
statement of which this prospectus forms a part. The certificate of designation
with respect to any series of preferred stock will be filed with the SEC as an
exhibit to a document incorporated by reference in this prospectus concurrently
with the offering of such preferred stock. The prospectus supplement will also
state whether any of the terms summarized below do not apply to the series of
preferred stock being offered. For a description of Doral Financial's
outstanding preferred stock, see "Description of Capital Stock."
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GENERAL
Under Doral Financial's restated certificate of incorporation, the board of
directors of Doral Financial is authorized to issue shares of preferred stock in
one or more series, and to establish from time to time a series of preferred
stock with the following terms specified:
- the number of shares to be included in the series;
- the designation, powers, preferences and rights of the shares of the
series; and
- the qualifications, limitations or restrictions of such series, except
as otherwise stated in the restated certificate of incorporation.
Prior to the issuance of any series of preferred stock, the board of
directors of Doral Financial will adopt resolutions creating and designating the
series as a series of preferred stock and the resolutions will be filed in a
certificate of designation as an amendment to the restated certificate of
incorporation. The term "board of directors of Doral Financial" includes any
duly authorized committee.
The preferred stock will be, when issued, fully paid and nonassessable.
Holders of preferred stock will not have any preemptive or subscription rights
to acquire more stock of Doral Financial.
The transfer agent, registrar, dividend disbursing agent and redemption
agent for shares of each series of preferred stock will be named in the
prospectus supplement relating to such series.
The rights of holders of the preferred stock offered may be adversely
affected by the rights of holders of any shares of preferred stock that may be
issued in the future. The board of directors may cause shares of preferred stock
to be issued in public or private transactions for any proper corporate purpose.
Examples of proper corporate purposes include issuances to obtain additional
financing in connection with acquisitions or otherwise, and issuances to
officers, directors and employees of Doral Financial and its subsidiaries
pursuant to benefit plans or otherwise. Shares of preferred stock issued by
Doral Financial may have the effect of rendering more difficult or discouraging
an acquisition of Doral Financial deemed undesirable by the board of directors
of Doral Financial.
RANK
Unless otherwise specified in the prospectus supplement relating to the
shares of any series of preferred stock, such shares will rank on an equal basis
with each other series of preferred stock and prior to the common stock as to
dividends and distributions of assets.
DIVIDENDS
Holders of each series of preferred stock will be entitled to receive cash
dividends, when, as and if declared by the board of directors of Doral Financial
out of funds legally available for dividends. The rates and dates of payment of
dividends will be set forth in the prospectus supplement relating to each series
of preferred stock. Dividends will be payable to holders of record of preferred
stock as they appear on the books of Doral Financial on the record dates fixed
by the board of directors. Dividends on any series of preferred stock may be
cumulative or noncumulative.
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Doral Financial is a party to contracts that prevent it from paying
dividends if it does not comply with some terms of those contracts. The
agreement pursuant to which Doral Financial issued its 7.84% Senior Notes due
2006, prohibits Doral Financial from paying dividends if the aggregate amount of
dividends paid on its capital stock, including all series of preferred stock,
would exceed the sum of the following:
- 50% of consolidated net income earned since October 1, 1996, and prior
to the end of the fiscal quarter ending not less than 45 days prior to
the proposed dividend payment date;
- $15 million; and
- the net proceeds of any sale of capital stock after October 1, 1996.
Doral Financial is a party to a warehousing loan agreement with Citibank,
N.A. that limits the aggregate amount of cash dividends that Doral Financial may
pay on its capital stock during a fiscal year to 50% of consolidated net income
for the immediately preceding fiscal year. Doral Financial has also entered into
a credit agreement with FirstBank Puerto Rico that restricts the amount of
dividends that Doral Financial may pay in any year to an amount not to exceed
Doral Financial's consolidated retained earnings as of the end of the
immediately preceding fiscal year.
Doral Financial may not declare, pay or set apart for payment dividends on
the preferred stock unless full dividends on any other series of preferred stock
that ranks on an equal or senior basis have been paid or sufficient funds have
been set apart for payment for
- all prior dividend periods of the other series of preferred stock that
pay dividends on a cumulative basis; or
- the immediately preceding dividend period of the other series of
preferred stock that pay dividends on a noncumulative basis.
Partial dividends declared on shares of preferred stock and any other
series of preferred stock ranking on an equal basis as to dividends will be
declared pro rata.
Similarly, Doral Financial may not declare, pay or set apart for payment
non-stock dividends or make other payments on the common stock or any other
stock of Doral Financial ranking junior to the preferred stock until full
dividends on the preferred stock have been paid or set apart for payment for
- all prior dividend periods if the preferred stock pays dividends on a
cumulative basis; or
- the dividend period established in the certificate of designation for
each series of preferred stock if the preferred stock pays dividends
on a noncumulative basis.
CONVERSION OR EXCHANGE
The prospectus supplement for any series of preferred stock will state the
terms, if any, on which shares of that series are convertible into shares of
another series of preferred stock or into shares of common stock of Doral
Financial.
If so determined by the board of directors of Doral Financial, the holders
of shares of preferred stock of any series may be obligated at any time or at
maturity to exchange such shares for common stock, preferred stock or debt
securities of Doral Financial. The terms of any such exchange and any such
preferred stock or debt securities will be described in the prospectus
supplement relating to such series of preferred stock.
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REDEMPTION
If so specified in the applicable prospectus supplement, a series of
preferred stock may be redeemable at any time, in whole or in part, at the
option of Doral Financial or the holder thereof and may be mandatorily redeemed.
Any partial redemptions of preferred stock will be made in a way that the
board of directors decides is equitable.
Unless Doral Financial defaults in the payment of the redemption price,
dividends will cease to accrue after the redemption date on shares of preferred
stock called for redemption and all rights of holders of such shares will
terminate except for the right to receive the redemption price.
LIQUIDATION PREFERENCE
Upon any voluntary or involuntary liquidation, dissolution or winding up of
Doral Financial, holders of each series of preferred stock will be entitled to
receive distributions upon liquidation in the amount set forth in the prospectus
supplement relating to such series of preferred stock. Such distributions will
be made before any distribution is made on any securities ranking junior
relating to liquidation, including common stock.
If the liquidation amounts payable relating to the preferred stock of any
series and any other securities ranking on a parity regarding liquidation rights
are not paid in full, the holders of the preferred stock of such series and such
other securities will share in any such distribution of available assets of
Doral Financial on a ratable basis in proportion to the full liquidation
preferences. Holders of such series of preferred stock will not be entitled to
any other amounts from Doral Financial after they have received their full
liquidation preference.
VOTING RIGHTS
The holders of shares of preferred stock will have no voting rights,
except:
- as otherwise stated in the prospectus supplement;
- as otherwise stated in the certificate of designation establishing
such series; or
- as required by applicable law.
Under regulations adopted by the Federal Reserve Board, if the holders of
the preferred stock of any series become entitled to vote for the election of
directors because dividends on the preferred stock of such series are in
arrears, preferred stock of such series could be deemed a "class of voting
securities." In this instance, a holder of 25% or more of the preferred stock of
such series could then be subject to regulation as a bank holding company in
accordance with the Bank Holding Company Act. A holder of 5% or more of such
series that otherwise exercises a "controlling influence" over Doral Financial
could also be subject to regulation under the Bank Holding Company Act. In
addition, at any time a series of the preferred stock is deemed a class of
voting securities, (1) 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 the
outstanding shares of such series of preferred stock, and (2) 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
such series.
Section 12 of the Puerto Rico Banking Law requires that the Office of the
Commissioner of Financial Institutions of Puerto Rico approve any change of
control involving a bank organized under the Banking Law. The Banking Law
requires that the Office of the Commissioner be informed not
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<PAGE> 21
less than 60 days prior to any transfer of voting stock of a Puerto Rico bank
that results in any person owning, directly or indirectly, more than 5% of the
outstanding voting stock of the bank. For the purposes of Section 12 of the
Banking Law, the term "control" means the power to, directly or indirectly,
direct or influence decisively the administration or the norms of the bank. The
Office of the Commissioner has made an administrative determination that these
provisions of the Banking Law are applicable to a change in control of Doral
Financial.
Pursuant to the Banking Law, if the Office of the Commissioner receives
notice of a proposed transaction that may result in a change of control of Doral
Financial, the Office of the Commissioner is required to investigate and
determine whether a change of control has occurred. The Office of the
Commissioner will issue an authorization for the transfer of control of Doral
Financial if the results of its investigations are in its judgment satisfactory.
The decision of the Office of the Commissioner is final and unreviewable.
DESCRIPTION OF CAPITAL STOCK
AUTHORIZED CAPITAL
As of the date of this prospectus, Doral Financial is authorized to issue
200,000,000 shares of common stock, $1.00 par value, and 10,000,000 shares of
serial preferred stock, $1.00 par value. The following is a summary of certain
rights and privileges of the common stock and outstanding serial preferred
stock. You should read the more detailed provisions of Doral Financial's
restated certificate of incorporation, as amended, and the certificate of
designation relating to any series of preferred stock for provisions that may be
important to you.
COMMON STOCK
As of September 30, 2000, Doral Financial had outstanding 42,362,634 shares
of its common stock. Each holder of common stock is entitled to one vote per
share for the election of directors and for all other matters to be voted on by
Doral Financial's stockholders. Holders of common stock may not cumulate their
votes in the election of directors, and are entitled to share equally in the
dividends that may be declared by the board of directors, but only after payment
of dividends required to be paid on outstanding shares of preferred stock.
Upon voluntary or involuntary liquidation, dissolution or winding up of
Doral Financial, the holders of the common stock share ratably in the assets
remaining after payments to creditors and provision for the preference of any
preferred stock. There are no preemptive or other subscription rights,
conversion rights or redemption or scheduled installment payment provisions
relating to shares of common stock. All of the outstanding shares of common
stock are fully paid and nonassessable. The transfer agent and registrar for the
common stock is Mellon Shareholder Services LLC. The common stock is traded on
the Nasdaq National Market System under the symbol "Dorl".
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PREFERRED STOCK
The general terms of Doral Financial's preferred stock are described above
under "DESCRIPTION OF PREFERRED STOCK." As of the date of this prospectus, Doral
Financial had outstanding two series of serial preferred described below.
<TABLE>
<CAPTION>
NUMBER OF ANNUAL LIQUIDATION CONVERSION GENERAL
SHARES DIVIDEND PREFERENCE DATE FIRST OR VOTING
TITLE OF SERIES OUTSTANDING RATE(1) PER SHARE(2) REDEEMABLE(3) EXCHANGE RIGHTS RIGHTS(4)
--------------- ----------- -------- ------------- ------------------ --------------- ---------
<S> <C> <C> <C> <C> <C> <C>
7% Non-cumulative 1,495,000 7% $50 February 28, 2004 None No
Monthly Income
Preferred Stock,
Series A (the "7%
Preferred Stock")
8.35% Non-cumulative 2,000,000 8.35% $25 September 30, 2005 None No
Monthly Income
Preferred Stock,
Series B (the "8.35%
Preferred Stock")
</TABLE>
---------------
(1) Based on a percentage of the applicable liquidation preference per share.
(2) See "Liquidation Rights" below for additional information.
(3) See "Redemption" below for additional information.
(4) See "Voting Rights" below for additional information.
Dividend Rights and Limitations. The holders of the shares of 7% Preferred
Stock and the 8.35% Preferred Stock are entitled to receive noncumulative cash
dividends when, as and if declared by the Board of Directors, at their
respective annual dividend rates payable monthly. The holders of the 7%
Preferred Stock and the 8.35% Preferred Stock are entitled to receive such
dividends prior to any payment of dividends or distribution of assets to holders
of the common stock and to any other class of capital stock ranking junior to
the 7% Preferred Stock or the 8.35% Preferred Stock with respect to the payment
of dividends.
Liquidation Rights. Upon the liquidation, dissolution or winding up of
Doral Financial, whether voluntary or involuntary, the holders of the 7%
Preferred Stock and the 8.35% Preferred Stock are entitled to receive out of the
assets of Doral Financial an amount in cash equal to their liquidation
preference per share plus accrued and unpaid dividends thereon for the current
monthly dividend period to the date of the distribution. This distribution must
be made before any payment may be made to the holders of common stock or any
other securities of Doral Financial ranking junior to the 7% Preferred Stock or
the 8.35% Preferred Stock as to the distribution of assets upon liquidation. No
distribution of this type or payment on account of liquidation, dissolution or
winding up of Doral Financial may be made to the holders of the shares of any
class or series of stock ranking on a parity with the 7% Preferred Stock or the
8.35% Preferred Stock as to the distribution of assets upon liquidation, unless
the holders of the 7% Preferred Stock or the 8.35% Preferred Stock receive like
amounts ratably in accordance with the full distributive amounts which they and
the holders of parity stock are respectively entitled to receive upon this
preferential distribution.
After the payment to the holders of the 7% Preferred Stock and the 8.35%
Preferred Stock of the full preferential amounts provided for above, the holders
of such shares will have no right or claim to any of the remaining assets of
Doral Financial.
Redemption. The 7% Preferred Stock is subject to redemption in whole or in
part, at the option of Doral Financial with the consent of the Federal Reserve
on or after February 28, 2004 and prior to February 27, 2005, at a price of $51
per share and after this period at redemption prices declining to a price of $50
per share on or after February 28, 2006.
21
<PAGE> 23
The 8.35% Preferred Stock is subject to redemption in whole or in part, at
the option of Doral Financial with the consent of the Federal Reserve commencing
on or after September 30, 2005, and prior to September 30, 2006 at a price of
$25.50 per share and after this period at redemption prices declining to $25 per
share on or after September 30, 2007.
There is no mandatory redemption or sinking fund obligation with respect to
either the 7% Preferred Stock or the 8.35% Preferred Stock.
Voting Rights. The holders of shares of 7% Preferred Stock and the 8.35%
Preferred Stock are not entitled to any voting rights except (1) if Doral
Financial does not pay dividends in full on such series for 18 consecutive
monthly dividend periods, (2) as required by law or (3) in connection with any
changes of the terms or rights of the 7% Preferred Stock or the 8.35% Preferred
Stock, as the case may be.
Rank vis-a-vis Series A Preferred Stock. The 7% Preferred Stock and the
8.35% Preferred Stock have the same rank as as to the payment of dividends and
as to the distribution of assets upon liquidation, dissolution or winding up of
Doral Financial.
PLAN OF DISTRIBUTION
Doral Financial may sell the offered securities (1) through agents; (2) to
or through underwriters or dealers; (3) directly to one or more purchasers; or
(4) through a combination of any of these methods of sale. Any underwriters,
dealers or agents retained by Doral Financial may include Doral Securities, its
broker-dealer subsidiary.
The prospectus supplement relating to an offering of offered securities
will set forth the terms of such offering, including:
- the name or names of any underwriters, dealers or agents;
- the purchase price of the offered securities and the proceeds to Doral
Financial from such sale;
- any underwriting discounts and commissions or agency fees and other
items constituting underwriters' or agents' compensation;
- the initial public offering price;
- any discounts or concessions to be allowed or reallowed or paid to
dealers; and
- any securities exchanges on which such offered securities may be listed.
Any initial public offering prices, discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to time.
BY AGENTS
Offered securities may be sold through agents designated by Doral
Financial. Any agent involved in the offer or sale of the offered securities in
respect of which this prospectus is delivered will be named, and any commissions
payable by Doral Financial to such agent will be set forth, in the prospectus
supplement relating to that offering. Unless otherwise indicated in such
prospectus supplement, the agents will agree to use their reasonable best
efforts to solicit purchases for the period of their appointment.
22
<PAGE> 24
BY UNDERWRITERS
If underwriters are used in the offering, the offered securities will be
acquired by the underwriters for their own account. The underwriters may resell
the securities from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at varying prices
determined at the time of sale. The securities may be either offered to the
public through underwriting syndicates represented by one or more managing
underwriters or by one or more underwriters without a syndicate. The obligations
of the underwriters to purchase the securities will be subject to certain
conditions. The underwriters will be obligated to purchase all the securities of
the series offered if any of the securities are purchased. Any initial public
offering price and any discounts or concessions allowed or re-allowed or paid to
dealers may be changed from time to time.
In connection with underwritten offerings of the offered securities and in
accordance with applicable law and industry practice, underwriters may
over-allot or effect transactions that stabilize, maintain or otherwise affect
the market price of the offered securities at levels above those that might
otherwise prevail in the open market, including by entering stabilizing bids,
effecting syndicate covering transactions or imposing penalty bids, each of
which is described below.
- A stabilizing bid means the placing of any bid, or the effecting of any
purchase, for the purpose of pegging, fixing or maintaining the price of
a security.
- A syndicate covering transaction means the placing of any bid on behalf
of the underwriting syndicate or the effecting of any purchase to reduce
a short position created in connection with the offering.
- A penalty bid means an arrangement that permits the managing underwriter
to reclaim a selling concession from a syndicate member in connection
with the offering when offered securities originally sold by the
syndicate member are purchased in syndicate covering transactions.
These transactions may be effected in the over-the-counter market, or
otherwise. Underwriters are not required to engage in any of these activities,
or to continue such activities if commenced.
PARTICIPATION OF DORAL SECURITIES
Doral Securities, the broker-dealer subsidiary of Doral Financial is a
member of the National Association of Securities Dealers, Inc. and may
participate in distributions of the offered securities. Accordingly, offerings
of offered securities in which Doral Securities participates will conform with
the requirements of Rule 2720 of the NASD's Conduct Rules.
DIRECT SALES
Offered securities may also be sold directly by Doral Financial. In this
case, no underwriters or agents would be involved.
GENERAL INFORMATION
Doral Financial may have agreements with the underwriters, dealers and
agents to indemnify them against certain civil liabilities, including
liabilities under the Securities Act of 1933, or to contribute with respect to
payments which the underwriters, dealers or agents may be required to make.
23
<PAGE> 25
Each series of offered securities will be a new issue of securities and
will have no established trading market. Any underwriters to whom offered
securities are sold for public offering and sale may make a market in such
offered securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. No assurance can be
given that there will be a market for the offered securities.
Underwriters, dealers and agents may engage in transactions with, or
perform services for, Doral Financial or its subsidiaries in the ordinary course
of their businesses.
WHERE YOU CAN FIND MORE INFORMATION
Doral Financial files annual, quarterly and current reports, proxy
statements and other information with the SEC. Doral Financial has also filed
with the SEC a registration statement on Form S-3, to register the securities
being offered by this prospectus. This prospectus, which forms part of the
registration statement, does not contain all of the information included in the
registration statement. For further information about Doral Financial and the
securities offered in this prospectus, you should refer to the registration
statement and its exhibits.
You may read and copy any document filed by Doral Financial with the SEC at
the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.
20549. Please call the SEC at 1-800-SEC-0330 for further information on the
operation of the Public Reference Room. Doral Financial files its SEC materials
electronically with the SEC, so you can also review Doral Financial's filings by
accessing the web site maintained by the SEC at http://www.sec.gov. This site
contains reports, proxy and information statements and other information
regarding issuers that file electronically with the SEC.
The SEC allows Doral Financial to "incorporate by reference" the
information it files with them, which means that it can disclose important
information to you by referring you to those documents. The information
incorporated by reference is considered to be a part of this prospectus.
Information that Doral Financial files later with the SEC will automatically
update and supersede information in this prospectus. In all cases, you should
rely on the later information over different information included in this
prospectus or the prospectus supplement. Doral Financial has previously filed
the following documents with the SEC and is incorporating them by reference into
this prospectus:
- Annual Report on Form 10-K for the year ended December 31, 1999;
- Quarterly Reports on Form 10-Q for the quarters ended March 31,
2000, June 30, 2000, and September 30, 2000; and
- Current Reports on Form 8-K, dated December 22, 1999, February 4,
2000, March 28, 2000 and August 31, 2000.
Doral Financial also incorporates by reference, from the date of the
initial filing of the registration statement, all documents filed by it with the
SEC under Sections 13(a), 13(c), 14, or 15(d) of the Securities Exchange Act of
1934 after the date of this prospectus and until Doral Financial sells all of
the securities being offered by this prospectus.
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<PAGE> 26
You may request a copy of these filings at no cost, by writing or
telephoning Doral Financial at the following address:
Doral Financial Corporation
Attn.: Mario S. Levis, Executive
Vice President & Treasurer
1159 Franklin D. Roosevelt Ave.
San Juan, Puerto Rico 00920
(787) 749-7108
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. Doral Financial has
not authorized anyone else to provide you with different information. Doral
Financial is not making an offer of these securities in any state where the
offer is not permitted. You should not assume that the information in this
prospectus or any prospectus supplement is accurate as of any date other than
the date on the front of those documents.
LEGAL OPINIONS
Unless otherwise specified in the applicable prospectus supplement,
Pietrantoni Mendez & Alvarez LLP, will issue an opinion about the legality of
the offered securities for Doral Financial. The name of the law firm advising
any underwriters or agents with respect to certain issues relating to any
offering will be set forth in the applicable prospectus supplement.
EXPERTS
The financial statements incorporated in this prospectus by reference to
Doral Financial's Annual Report on Form 10-K for the year ended December 31,
1999 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.
25
<PAGE> 27
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses in connection with the offering all of which will be borne
by the Registrant are as follows (all amounts are estimates except for the SEC
Registration fee):
<TABLE>
<S> <C>
SEC registration fee.............................. $ 62,500
NASD Fee.......................................... 20,500
Printing expenses................................. 75,000
Legal fees and expenses........................... 150,000
Accounting fees and expenses...................... 70,000
Trustees and registrar's fees and expenses........ 30,000
Rating Agency fees................................ 225,000
Listing fees...................................... 30,000
Miscellaneous..................................... 22,000
--------
Total........................................ $685,000
--------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
(a) Article 1.02(B)(6) of the Puerto Rico General Corporation Act
(the "PR GCA") provides that a corporation may include in its certificate of
incorporation a provision eliminating or limiting the personal liability of
members of its board of directors or governing body for breach of a director's
fiduciary duty of care. However, no such provision may eliminate or limit the
liability of a director for breaching his duty of loyalty, failing to act in
good faith, engaging in intentional misconduct or knowingly violating a law,
paying a dividend or approving a stock repurchase which was illegal, or
obtaining an improper personal benefit. A provision of this type has no effect
on the availability or equitable remedies, such as injunction or rescission, for
breach of fiduciary duty. Article Seventh of Doral Financial's Restated
Certificate of Incorporation contains such a provision.
(b) Article 4.09 of the PR GCA authorizes Puerto Rico corporations
to indemnify their officers and directors against liabilities arising out of
pending or threatened actions, suits or proceedings to which they are or may be
made parties by reason of being directors or officers. Such rights of
indemnification are not exclusive of any other rights to which such officers or
directors may be entitled under any by-law, agreement, vote of stockholders or
otherwise. The Restated Certificate of Incorporation of Doral Financial provides
that Doral Financial shall indemnify its directors, officers and employees to
the fullest extent permitted by law. Doral Financial also maintains directors'
and officers' liability insurance on behalf of its directors and officers.
(c) Section 1 of Article IX of Doral Financial's By-laws (the
"By-laws") provides that Doral Financial 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 Doral Financial) by
reason of the fact that he is or was a director, officer, employee or agent of
Doral Financial or is or was serving at the request of Doral Financial as a
director, officer, employer or agent of another corporation or 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
II-1
<PAGE> 28
best interests of Doral Financial, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful.
Section 2 of Article IX of the By-laws provides that Doral Financial
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 Doral Financial to procure a judgment in its favor by reason of the fact that
such person acted in any of the capacities set forth above, against expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted under similar standards set forth
in the preceding paragraph, except that no indemnification may be made in
respect of any claim, issue or matter as to which such person shall have been
adjudged to be liable to Doral Financial unless and only to the extent that the
court in which such action or suit was brought shall determine that despite the
adjudication of liability, such person is fairly and reasonably entitled to be
indemnified for such expenses which the court shall deem proper.
Section 3 of Article IX of the By-laws provides that to the extent a
director or officer of Doral Financial has been successful on the merits or
otherwise in the defense of any action, suit or proceeding referred to in
Sections 1 and 2 of Article IX of the By-laws or in the 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.
Section 5 of Article IX of the By-laws provides that Doral Financial
shall pay expenses incurred in defending a civil or criminal action, suit or
proceeding in advance of the final disposition of such action, suit or
proceeding. Doral Financial must make such advanced payments if it receives an
undertaking by or on behalf of any person covered by Section 1 of Article IX of
the By-laws to repay such amounts, if it is ultimately determined that he is not
entitled to be indemnified by Doral Financial as authorized in Article IX of the
By-laws.
Section 6 and 7 of Article IX of the By-laws provide that
indemnification provided for by Sections 1 and 2 of Article IX of the By-laws
shall not be deemed exclusive of any other rights to which the indemnified party
may be entitled; and that Doral Financial may purchase and maintain insurance on
behalf of a director or officer of Doral Financial against any liability
asserted against him or incurred by him in any such capacity or arising out of
his status as such whether or not Doral Financial would have the power to
indemnify him against such liabilities under such Sections 1 and 2 of Article IX
of the By-laws.
ITEM 16. LIST OF EXHIBITS
<TABLE>
<S> <C>
1.1** Form of Underwriting Agreement.
4.1 Senior Indenture. (Incorporated by reference from
Registration Statement No. 333-76259.)
4.2 Form of Senior Note. (Incorporated by reference from
Registration Statement No. 333-76259.)
4.3 Subordinated Indenture. (Incorporated by reference from
Registration Statement No. 333-76259.)
4.4 Form of Subordinated Note (Incorporated by reference from
Registration Statement No. 333-76259.)
4.5** Form of Certificate of Designations, Preferences and Rights
of Preferred Stock.
</TABLE>
II-2
<PAGE> 29
<TABLE>
<S> <C>
4.5 Form of Common Stock Certificate (incorporated by reference to
Exhibit Number 4.1 of Doral Financial's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1998.
4.6** Form Preferred Stock Certificate.
4.7 Certificate of Incorporation of Doral Financial as currently
in effect (incorporated by reference to Exhibit Number 3.1(c)
of Doral Financial's Annual Report on Form 10-K for the year
ended December 31, 1998)
4.8 By-laws of Doral Financial, as amended as of October 19, 1998
(incorporated by reference to Exhibit Number 3.2 of Doral
Financial's Quarterly Report on Form 10-Q for the quarter
ended September 30, 1998
5.1* Opinion of Pietrantoni Mendez & Alvarez LLP regarding
legality of the Offered Securities.
12.1* Statement of Computation of Ratios of Earnings to Fixed
Charges and Earnings to Fixed Changes.
12.2* Statement of Computation of Ratios of Earnings to Fixed
Charges and Preferred Stock Dividends.
23.1* Consent of Pietrantoni Mendez & Alvarez LLP (included in
Exhibit 5.1).
23.2* Consent of PricewaterhouseCoopers LLP.
24.1* Powers of Attorney (included at page II-5).
25.1* Statement of Eligibility of Senior Trustee on Form T-1.
25.2* Statement of Eligibility of Subordinated Trustee on
Form T-1.
</TABLE>
---------------
* Filed herewith.
** To be incorporated by reference from a Current Report on Form 8-K.
ITEM 17. UNDERTAKINGS
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to the Registration Statement:
(i) To include any prospectus required by Section 10(a)
(3) of the Securities Act;
(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 end 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% 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.
II-3
<PAGE> 30
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if
the Registration Statement is on Form S-3 or Form S-8 and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the Registrant pursuant to Section 13 or
Section 15(d) of the Exchange Act that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
(b) That, for purposes of determining any liability under the Act,
each filing of the Registrant's annual report pursuant to Section 13(a) or 15(d)
of the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
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 Act,
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 the 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 the purpose of determining any liability under the
Act, 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 hereof.
The undersigned Registrant hereby undertakes to file an application for
the purpose of determining the eligibility of the senior debt trustee and
subordinated debt trustee to act under subsection (a) of Section 310 of the
Trust Indenture Act of 1939, as amended (the "Act"), in accordance with the
rules and regulations prescribed by the Commission under Section 305(b)(2) of
the Act.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions in Item 15, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant 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
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
II-4
<PAGE> 31
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
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 San Juan, Puerto Rico, on the 29th of December, 2000.
DORAL FINANCIAL CORPORATION
By: /s/ Salomon Levis
-------------------------------------------------
Salomon Levis
Chairman of the Board and Chief Executive Officer
POWERS OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Salomon Levis and Richard F. Bonini and each of them, each with full
power to act without the other, his true and lawful attorneys-in-fact and
agents, each with full power of substitution and resubstitution, for him and in
his name, place and stead in any and all capacities, to sign any and all
amendments (including post-effective amendments) to this Registration Statement,
and any registration statement relating to the same offering as this
Registration Statement that is to be effective upon filing pursuant to Rule
462(b) under the Securities Act of 1933, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto each of said attorneys-in-fact and agents
full power and authority to do and perform each and every act and thing
requisite and 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 each of said attorneys-in-fact and agents, or his substitute
or substitutes, may lawfully do or cause to be done by virtue hereof.
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:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Salomon Levis Chairman of the Board and December 29, 2000
---------------------------------- Chief Executive Officer
Salomon Levis
/s/ Richard F. Bonini Senior Executive Vice December 29, 2000
---------------------------------- President, Chief Financial Officer
Richard F. Bonini and Director
/s/ Ricardo Melendez Vice President and December 29, 2000
---------------------------------- Chief Accounting Officer
Ricardo Melendez
/s/ A. Brean Murray Director December 29, 2000
----------------------------------
A. Brean Murray
/s/ Edgar M. Cullman, Jr. Director December 29, 2000
----------------------------------
Edgar M. Cullman, Jr.
/s/ John L. Ernst Director December 29, 2000
----------------------------------
John L. Ernst
/s/ Efraim M. Kier Director December 29, 2000
----------------------------------
Efraim M. Kier
/s/ Zoila Levis Director December 29, 2000
----------------------------------
Zoila Levis
/s/ Harold D. Vicente Director December 29, 2000
----------------------------------
Harold D. Vicente
</TABLE>
II-5
