| Item 1.01. | Entry into a Material Definitive Agreement. |
On September 14, 2018, Popular, Inc. (the “Corporation”) issued $300,000,000 aggregate principal amount of 6.125% Senior Notes due 2023 (the “Notes”) in an underwritten public offering pursuant to an effective shelf registration statement filed with the Securities and Exchange Commission. The Corporation intends to use the net proceeds of the offering and available cash to redeem $450 million aggregate principal amount of its outstanding 7.00% Senior Notes due 2019.
The Notes were issued pursuant to the Indenture, dated as of February 15, 1995, as supplemented from time to time (the “Base Indenture”), and as further supplemented by the Ninth Supplemental Indenture, dated as of September 14, 2018 (the “Ninth Supplemental Indenture”, together with the Base Indenture, the “Indenture”), between the Corporation and The Bank of New York Mellon, as trustee.
The Notes bear interest at a rate of 6.125% per annum and mature on September 14, 2023. Interest will be payable semiannually in arrears on March 14 and September 14 of each year, commencing on March 14, 2019. The Notes are unsecured senior debt securities and rank equally in right of payment with all the Corporation’s other existing and future unsecured senior indebtedness.
Prior to August 14, 2023, the Notes may be redeemed, at the Corporation’s option, in whole at any time or in part from time to time, at a redemption price equal to the greater of (i) 100% of the principal amount of the Notes to be redeemed, or (ii) the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed that would be due after the related redemption date and on or prior to August 14, 2023 (exclusive of any interest accrued to such redemption date), discounted to the redemption date on a semiannual basis (assuming a360-day year consisting of twelve30-day months) at the Treasury Rate (as defined in the Indenture) plus 50 basis points, plus, in each case, unpaid interest, if any, accrued to, but not including, such redemption date. If the Corporation redeems the Notes on or after August 14, 2023, the Notes will be redeemed at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest to the redemption date.
The Ninth Supplemental Indenture has been filed as Exhibit 4.1 to this Current Report on Form8-K. The description of the Ninth Supplemental Indenture contained herein is qualified in its entirety by reference to the Ninth Supplemental Indenture, which is incorporated into this Item 1.01 by reference. Any information disclosed in this Current Report on Form8-K or the exhibits hereto shall not be construed as an admission that such information is material.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under anOff-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 above is hereby incorporated by reference into this Item 2.03.
The following documents relating to the sale of the Notes are filed as exhibits to this Current Report on Form8-K and are incorporated into this Item 8.01 by reference:
| | • | | Underwriting Agreement, dated September 11, 2018, between the Corporation and J.P. Morgan Securities LLC, Barclays Capital Inc., Goldman Sachs & Co. LLC, and Morgan Stanley & Co. LLC, as representatives of the several underwriters named therein; |
| | • | | Opinion of Sullivan & Cromwell LLP, dated September 14, 2018, as to the validity of the Notes; and |
| | • | | Opinion of Pietrantoni Méndez & Alvarez LLC, dated September 14, 2018, as to certain United States and Puerto Rico income tax matters. |
