1
File pursuant to Rule 424(b)(5)
Registration Statement No. 333-82507
333-82507-01
333-82507-02
The information in this pricing supplement is not complete and may be changed.
This pricing supplement is not an offer to sell these securities and is not
soliciting an offer to buy these securities in any jurisdiction where the offer
or sale is not permitted.
Subject to completion, dated October 2, 2001.
PRELIMINARY PRICING SUPPLEMENT DATED OCTOBER 2, 2001
TO PROSPECTUS SUPPLEMENT DATED AUGUST 6, 1999
TO PROSPECTUS DATED AUGUST 6, 1999
$
POPULAR NORTH AMERICA, INC.
MEDIUM-TERM NOTES, SERIES E
% NOTES DUE
UNCONDITIONALLY GUARANTEED AS TO PAYMENT OF PRINCIPAL AND INTEREST BY
POPULAR, INC.
The notes will bear interest at the rate of % per year. We will pay
interest on the notes on each and , commencing on , 2002. The
notes will mature on , . The notes will be issued only in
denominations of $1,000 and integral multiples of $1,000.
The information in the accompanying prospectus and prospectus
supplement under "Description of Debt Securities We May Offer" and "Description
of Notes We May Offer" and so specified in this pricing supplement is applicable
to the notes.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
pricing supplement, the accompanying prospectus supplement or the accompanying
prospectus is truthful and complete. Any representation to the contrary is a
criminal offense.
Underwriting
Price to Discounts and Proceeds to
Public (1) Commissions Popular North America, Inc.(1)
---------- ------------- ------------------------------
Per Note............. % % %
Total................ $ $ $
(1) Plus accrued interest from , 2001, if settlement occurs
after that date.
The underwriters expect to deliver the notes to purchasers in
book-entry form only through the facilities of The Depository Trust Company on
or about , 2001.
CREDIT SUISSE FIRST BOSTON JPMORGAN POPULAR SECURITIES, INC.
The date of this pricing supplement is October , 2001.
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TABLE OF CONTENTS
PAGE
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PRICING SUPPLEMENT
Popular, Inc....................................................................................................S-2
Popular North America, Inc......................................................................................S-2
Selected Financial Information of Popular, Inc..................................................................S-4
Consolidated Ratios of Earnings to Fixed Charges of Popular, Inc................................................S-5
Use of Proceeds.................................................................................................S-5
Description of the Notes........................................................................................S-6
Underwriting....................................................................................................S-7
Validity of the Notes...........................................................................................S-8
Experts.........................................................................................................S-8
PROSPECTUS SUPPLEMENT
Description of Notes We May Offer...............................................................................S-2
United States Taxation.........................................................................................S-20
Supplemental Plan of Distribution..............................................................................S-31
Validity of the Notes..........................................................................................S-32
PROSPECTUS
Popular, Inc......................................................................................................2
Popular International Bank, Inc...................................................................................3
Popular North America, Inc........................................................................................3
Consolidated Ratios of Earnings to Fixed Charges of Popular, Inc..................................................4
Holding Company Structure.........................................................................................4
Use of Proceeds...................................................................................................6
Description of Debt Securities We May Offer.......................................................................7
Description of Preferred Stock...................................................................................23
Validity of Offered Securities...................................................................................27
Experts..........................................................................................................27
Plan of Distribution.............................................................................................27
Where You Can Find More Information..............................................................................29
Incorporation of Information We File with the SEC................................................................29
--------------------
You should rely only on the information contained in this document or
incorporated in this document by reference. We have not authorized anyone to
provide you with different or additional information. This document may be used
only where it is legal to sell these securities. The information in this
document may only be accurate on the date of this document.
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POPULAR, INC.
Popular, Inc. is a diversified, publicly owned bank holding company,
registered under the Bank Holding Company Act of 1956, as amended and,
accordingly, subject to the supervision and regulation of the Board of Governors
of the Federal Reserve System. Popular, Inc. was incorporated in 1984 under the
laws of the Commonwealth of Puerto Rico and is the largest financial institution
in Puerto Rico, with consolidated assets of $27.9 billion, deposits of $15.6
billion and stockholders' equity of $2.2 billion at June 30, 2001. Based on
total assets at September 26, 2001, Popular, Inc. was the 32nd largest bank
holding company in the United States.
Popular, Inc.'s principal subsidiary, Banco Popular de Puerto Rico, was
incorporated in 1893 and is Puerto Rico's largest bank with consolidated assets
of $18.5 billion, deposits of $11.3 billion and stockholders' equity of $1.5
billion at June 30, 2001. Banco Popular de Puerto Rico accounted for 67% of the
consolidated assets of Popular, Inc. at June 30, 2001. A consumer-oriented bank,
Banco Popular de Puerto Rico has the largest retail franchise in Puerto Rico,
operating 198 branches and 497 automated teller machines. Banco Popular de
Puerto Rico has the largest trust operation in Puerto Rico. Banco Popular de
Puerto Rico also operates 12 branches in the U.S. Virgin Islands, one branch in
the British Virgin Islands and one branch in New York. Banco Popular de Puerto
Rico's deposits are insured under the Bank Insurance Fund of the Federal Deposit
Insurance Corporation.
Banco Popular de Puerto Rico has three subsidiaries: Popular Auto,
Inc., Puerto Rico's largest vehicle leasing and daily rental company, Popular
Finance, Inc., a small-loan and second mortgage company with 60 offices in
Puerto Rico, and Popular Mortgage, Inc., a mortgage loan company with 22 offices
in Puerto Rico.
Popular, Inc. has three other principal subsidiaries: Popular
Securities, Inc., Popular International Bank, Inc. and GM Group, Inc. Popular
Securities, Inc. is a securities broker-dealer in Puerto Rico with financial
advisory, investment and security brokerage operations for institutional and
retail customers and is an underwriter of the notes. Popular International Bank,
Inc. owns the outstanding stock of Popular North America, Inc., ATH Costa Rica
and CreST, S.A. GM Group, Inc. provides electronic data processing and
consulting services, sale and rental of electronic data processing equipment,
and sale and maintenance of computer software to clients in ten countries
through offices in Puerto Rico, Venezuela, Miami and the Dominican Republic. At
June 30, 2001, GM Group, Inc. had assets of $77.5 million.
In addition, Popular, Inc. has an 85% investment in Newco Mortgage
Holding Corporation, a mortgage banking organization with operations in Puerto
Rico that does business as Levitt Mortgage. At June 30, 2001, the assets of
Levitt Mortgage totaled $8.7 million.
Effective May 30, 2001, Popular International Bank, Inc. exercised its
option to acquire 19.99% of Centro Financiero BHD, S.A., a diversified financial
company in the Dominican Republic with consolidated assets of $1.1 billion at
December 31, 2000.
Popular International Bank, Inc. is a wholly-owned subsidiary of
Popular, Inc. organized in 1992 that operates as an "international banking
entity" under the International Banking Center Regulatory Act of Puerto Rico.
Popular International Bank, Inc. is a registered bank holding company under the
Bank Holding Company Act and is principally engaged in providing managerial
services to its subsidiaries.
POPULAR NORTH AMERICA, INC.
Popular North America, Inc., a wholly-owned subsidiary of Popular
International Bank, Inc. and an indirect wholly-owned subsidiary of Popular,
Inc., was organized in 1991 under the laws of the State of Delaware and is a
registered bank holding company under the Bank Holding Company Act. Popular
North America, Inc. functions as a holding company for Popular, Inc.'s mainland
U.S. operations. As of June 30, 2001, Popular North America, Inc. had five
direct subsidiaries, all of which were wholly-owned: Banco Popular North
America, a full service commercial bank incorporated in New York State; Equity
One, Inc., a diversified consumer finance company; Popular Cash Express, Inc., a
retail financial services company; BanPonce Trust I, a statutory business trust;
and Banco Popular, National Association, chartered in Orlando, Florida. Banco
Popular, National Association commenced operations as a full service commercial
bank on July 1, 2000. As of June 30, 2001, it operated one
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branch, its assets amounted to $31 million and it had deposits of $14.8 million.
Popular Insurance, Inc., a wholly-owned non-bank subsidiary of Banco Popular,
National Association and an indirect subsidiary of Popular North America, Inc.,
also commenced operations on July 1, 2000. Popular Insurance, Inc. is a general
insurance agency that offers insurance products in Puerto Rico. As of June 30,
2001, its assets amounted to $10 million. Popular Holdings USA, Inc., which
previously was the holding company of Banco Popular North America, merged with
and into Popular North America, Inc. on November 1, 2000.
The banking operations of Banco Popular North America in the mainland
United States are based in six states. Banco Popular North America operated 96
branches, which accounted for aggregate assets of $5.1 billion and deposits of
$4.3 billion as of June 30, 2001. The deposits of Banco Popular North America
are insured under the Bank Insurance Fund by the FDIC.
In addition, Banco Popular North America owned all of the outstanding
stock of Popular Leasing, USA, a non-banking subsidiary that offers small ticket
equipment leasing with 11 offices in eight states and assets of $118 million as
of June 30, 2001.
Equity One, Inc., a wholly owned subsidiary of Popular North America,
Inc., is engaged in the business of granting personal and mortgage loans and
providing dealer financing through 142 offices in 28 states. It had assets of
$2.8 billion as of June 30, 2001. Popular Cash Express, Inc., a wholly owned
subsidiary of Popular North America, Inc., offers services such as check
cashing, money transfers to other countries, money order sales and processing of
payments through 94 offices and 52 mobile check cashing units in five states in
the United States and in Washington, D.C. Its assets totaled $60.9 million as of
June 30, 2001.
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SELECTED FINANCIAL INFORMATION OF POPULAR, INC.
The following table contains selected consolidated financial
information for the periods presented. The financial information is included in
our quarterly report on Form 10-Q for the quarter ended June 30, 2001 and in our
annual report on Form 10-K for the year ended December 31, 2000, both of which
are incorporated by reference in this pricing supplement.
As of or for the Six
Months Ended June 30, As of or for the Year Ended December 31,
------------------------------ -------------------------------------------------
2001 2000 2000 1999 1998
------------ ------------ ------------ ------------ ------------
(in thousands)
CONDENSED INCOME STATEMENTS
Interest income $ 1,073,858 $ 1,030,575 $ 2,150,157 $ 1,851,670 $ 1,651,703
Interest expense 552,623 542,419 1,167,396 897,932 778,691
------------ ------------ ------------ ------------ ------------
Net Interest income 521,235 488,156 982,761 953,738 873,012
------------ ------------ ------------ ------------ ------------
Securities, trading and derivatives
gains (losses) 413 15,103 13,431 (944) 12,586
Operating income 235,854 209,908 451,667 373,860 278,660
Operating expenses 452,447 445,876 877,471 837,482 720,354
Provision for loan losses 99,496 98,732 194,640 148,948 137,213
Net loss of minority interest 12 1,193 1,152 2,454 328
Income tax 54,488 40,440 100,797 85,120 74,671
Cumulative effect of accounting
changes 686 -- -- -- --
------------ ------------ ------------ ------------ ------------
Net income $ 151,769 $ 129,312 $ 276,103 $ 257,558 $ 232,348
============ ============ ============ ============ ============
AVERAGE BALANCES
Net loans(1) $ 16,496,421 $ 15,354,380 $ 15,801,887 $ 13,901,290 $ 11,930,621
Earning assets 25,912,467 24,046,773 24,893,366 22,244,959 19,261,949
Total assets 27,448,384 25,719,423 26,569,755 23,806,372 20,432,382
Deposits 15,068,602 14,284,696 14,508,482 13,791,338 12,270,101
Subordinated notes 125,000 125,000 125,000 125,000 125,000
Preferred beneficial interest in
Popular North America's junior
subordinated deferrable interest
debentures guaranteed by Popular,
Inc. 150,000 150,000 150,000 150,000 150,000
Total stockholders' equity 2,044,659 1,836,261 1,884,525 1,712,792 1,553,258
PERIOD END BALANCES
Net loans(1) $ 17,192,246 $ 15,774,604 $ 16,057,085 $ 14,907,754 $ 13,078,795
Allowance for loan losses 313,337 305,526 290,653 292,010 267,249
Earning assets 26,247,258 24,677,648 26,339,431 23,754,620 21,591,950
Total assets 27,850,634 26,451,246 28,057,051 25,460,539 23,160,357
Deposits 15,569,785 14,460,454 14,804,907 14,173,715 13,672,214
Subordinated notes 125,000 125,000 125,000 125,000 125,000
Preferred beneficial interest in
Popular North America's junior
subordinated deferrable
interest debentures guaranteed by
Popular, Inc. 150,000 150,000 150,000 150,000 150,000
Total stockholders' equity 2,166,652 1,736,890 1,993,644 1,660,986 1,709,113
FINANCIAL PERFORMANCE RATIOS
Return on average total assets 1.12% 1.01% 1.04% 1.08% 1.14%
Return on average common stockholders'
equity 15.31 14.50 15.00 15.45 15.41
Net interest yield (taxable equivalent
basis) 4.33 4.36 4.23 4.65 4.91
Efficiency ratio 59.76 63.87 61.57 63.08 62.55
Overhead ratio 41.47 45.24 41.96 48.71 49.15
As of or for the Year Ended December 31,
----------------------------------------
1997 1996
------------ ------------
CONDENSED INCOME STATEMENTS
Interest income $ 1,491,303 $ 1,272,853
Interest expense 707,348 591,540
------------ ------------
Net Interest income 783,955 681,313
------------ ------------
Securities, trading and derivatives
gains (losses) 6,202 3,202
Operating income 241,396 202,270
Operating expenses 636,920 541,919
Provision for loan losses 110,607 88,839
Net loss of minority interest -- --
Income tax 74,461 70,877
Cumulative effect of accounting
changes -- --
------------ ------------
Net income $ 209,565 $ 185,150
============ ============
AVERAGE BALANCES
Net loans(1) $ 10,548,207 $ 9,210,964
Earning assets 17,409,634 15,306,311
Total assets 18,419,144 16,301,082
Deposits 10,991,557 10,461,796
Subordinated notes 125,000 147,951
Preferred beneficial interest in
Popular North America's junior
subordinated deferrable interest
debentures guaranteed by Popular,
Inc. 122,877 --
Total stockholders' equity 1,370,984 1,193,506
PERIOD END BALANCES
Net loans(1) $ 11,376,607 $ 9,779,028
Allowance for loan losses 211,651 185,574
Earning assets 18,060,998 15,484,454
Total assets 19,300,507 16,764,103
Deposits 11,749,586 10,763,275
Subordinated notes 125,000 125,000
Preferred beneficial interest in
Popular North America's junior
subordinated deferrable
interest debentures guaranteed by
Popular, Inc. 150,000 --
Total stockholders' equity 1,503,092 1,262,532
FINANCIAL PERFORMANCE RATIOS
Return on average total assets 1.14% 1.14%
Return on average common stockholders'
equity 15.83 16.17
Net interest yield (taxable equivalent
basis) 4.84 4.77
Efficiency ratio 62.12 61.33
Overhead ratio 49.66 49.38
(1) Includes loans held-for-sale
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As of or for the Six
Months Ended June 30, As of or for the Year Ended December 31,
--------------------- -------------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
----- ----- ----- ----- ----- ----- -----
CAPITALIZATION RATIOS
Tier I capital to risk-adjusted assets 10.60% 10.09% 10.44% 10.17% 10.82% 12.17% 11.63%
Total capital to risk-adjusted assets 12.57 12.12 12.37 12.29 13.14 14.56 14.18
Leverage 6.89 6.42 6.40 6.40 6.72 6.86 6.71
ASSET QUALITY RATIOS
Allowance for loan losses to loans 1.82% 1.94% 1.81% 1.96% 2.04% 1.86% 1.90%
Allowance to non-performing assets 81.90 80.30 83.82 89.54 90.32 99.11 119.23
Non-performing assets to loans 2.23 2.41 2.16 2.19 2.26 1.88 1.59
Net charge-offs to average loans(2) 0.94 1.13 1.14 0.90 0.95 0.93 0.78
(2) Annualized for the six months ended June 30, 2001 and June 30, 2000.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES OF POPULAR, INC.
Six Months Ended June 30, Year Ended December 31,
------------------------- -----------------------
2001 2000 2000 1999
---- ---- ---- ----
Ratio of Earnings to Fixed Charges
Including Interest on Deposits 1.4 1.3 1.3 1.4
Excluding Interest on Deposits 1.7 1.5 1.6 1.7
For purposes of computing these consolidated ratios, earnings
represents income before income taxes plus fixed charges. Fixed charges
represents all interest expense (ratios are presented both excluding and
including interest on deposits), the portion of net rental expense which is
deemed representative of the interest factor, the amortization of debt issuance
expense and capitalized interest.
See "Consolidated Ratios of Earnings to Fixed Charges of Popular, Inc."
in the accompanying prospectus for these ratios for the years ended December 31,
1994 through 1998.
USE OF PROCEEDS
Popular North America, Inc. will use the net proceeds of this offering
for general corporate purposes, including investments in or extensions of credit
to its existing and future subsidiaries and repayment of outstanding borrowings.
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DESCRIPTION OF THE NOTES
The following description of the terms of the notes adds information to
the descriptions of the general terms and provisions of notes in the
accompanying prospectus supplement and of debt securities in the accompanying
prospectus. If this description differs in any way from the description in the
accompanying prospectus supplement and prospectus, you should rely on this
description.
The aggregate principal amount of the series of notes is $ ,
subject to further issuances as described below under "- Further Issuances." The
notes will mature on , . The notes are unsecured senior debt securities
of Popular North America, Inc. and will rank equally with all other unsecured
and unsubordinated indebtedness of Popular North America, Inc. The guarantees
are unsecured senior obligations of Popular, Inc. and will rank equally with all
other unsecured and unsubordinated obligations of Popular, Inc. The notes will
be issued in denominations of $1,000 and integral multiples of $1,000.
The notes may not be redeemed, in whole or in part, before maturity and
do not provide for any sinking fund - that is, we will not set aside money on a
regular basis in a separate custodial account to repay the notes.
We will issue the notes under an indenture dated as of October 1, 1991,
as supplemented, with Bank One, NA, as trustee. For more information about the
indenture, see "Description of Debt Securities We May Offer" in the accompanying
prospectus. The paying agent and agent for registration and transfer of the
notes will initially be Bank One, NA, 14 Wall Street, Eighth Floor, New York,
New York 10005, Attention: Corporate Trust Services.
The indenture does not limit the amount of other debt that Popular,
Inc. or any of its subsidiaries may issue except for certain secured debt of
Popular, Inc. or any material banking subsidiary of Popular, Inc., as described
in the accompanying prospectus under "Description of Debt Securities We May
Offer - Restrictive Covenants."
INTEREST
The notes will bear interest from October , 2001 or from the most
recent interest payment date on which Popular North America, Inc. has paid or
provided for interest on the notes, at the annual rate stated on the cover of
this pricing supplement, payable semiannually on and of each year,
commencing on 2002, to the person in whose name the notes are registered
at the close of business on or , as the case may be, immediately
preceding that or . Interest on the notes will be computed on the
basis of a 360-day year composed of twelve 30-day months. If any payment date
for notes is not a business day, we will make the payment on the next business
day, but without any additional interest as a result of the delay in payment. By
business day we mean each Monday, Tuesday, Wednesday, Thursday and Friday which
is not a day on which banking institutions in New York, New York are authorized
or obligated by law or executive order to close.
FURTHER ISSUANCES
We may, without the consent of the holders of the notes, issue
additional notes having the same ranking and the same interest rate, maturity
and other terms as the notes offered by this pricing supplement. Any additional
notes will, together with the notes offered by this pricing supplement,
constitute a single series of notes under the indenture.
GLOBAL NOTES
The notes will be represented by or more global notes deposited with
The Depository Trust Company as the depositary for the notes and registered in
the name of DTC's nominee. See "Description of Debt Securities We May Offer -
Legal Ownership of Securities," "- What Is a Global Debt Security?" and "-
Special Considerations for Global Debt Securities" in the accompanying
prospectus for additional information about DTC and procedures applicable to the
global notes.
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UNDERWRITING
Under the terms and subject to the conditions contained in a terms
agreement dated , 2001, which supplements the distribution agreement
described in the attached prospectus supplement under the heading "Supplemental
Plan of Distribution," we have agreed to sell to the underwriters named below,
and the underwriters have severally but not jointly agreed to purchase from us,
the following respective principal amounts of the notes:
Underwriter Principal Amount
----------- ----------------
Credit Suisse First Boston Corporation.............................................. $
J.P. Morgan Securities Inc..........................................................
Popular Securities, Inc.............................................................
----------------
Total............................................................................... $
================
The terms agreement provides that the obligations of the underwriters
to purchase the notes included in this offering are subject to approval of legal
matters by counsel and to other conditions. The terms agreement provides that
the underwriters are obligated to purchase all of the notes, if they purchase
any of the notes.
The underwriters propose to offer some of the notes directly to the
public at the public offering price stated on the cover page of this pricing
supplement and some of the notes to dealers at that price less a concession not
to exceed % of their principal amount. The underwriters may allow, and
dealers may reallow, a concession not to exceed % of the principal amount per
note on sales to other dealers. After the initial public offering, the
underwriters may change the public offering price and concessions.
The notes are a new issue of securities with no established trading
market. One or more of the underwriters have advised us that they intend to make
a secondary market for the notes. However, they are not obligated to do so and
may discontinue making a secondary market for the notes at any time without
notice. We do not know if there will be a trading market for the notes or if any
trading market will be liquid.
We have agreed to indemnify the underwriters against certain
liabilities, including certain liabilities under the Securities Act of 1933, as
amended, or contribute to payments which the underwriters may be required to
make in respect of these liabilities.
The underwriters may engage in over-allotment, stabilizing
transactions, syndicate covering transactions and penalty bids in accordance
with Regulation M under the Securities Exchange Act of 1934, as amended.
- Over-allotment involves syndicate sales in excess of the offering size,
which creates a syndicate short position.
- Stabilizing transactions consist of certain bids or purchases of notes
made for the purpose of preventing or retarding a decline in the market
price of the notes while the offering is in progress.
- Syndicate covering transactions involve purchases of the notes in the
open market after the distribution has been completed in order to cover
syndicate short positions.
- Penalty bids permit the underwriters to reclaim a selling concession
from a syndicate member when the notes originally sold by the syndicate
member are purchased in a syndicate or stabilizing transaction.
Any of these transactions may have the effect of preventing or
retarding a decline in the market price of the notes. They may also cause the
price of the notes to be higher than it would otherwise be in the absence of
these transactions. The underwriters may conduct these transactions in the
over-the-counter market or otherwise. If the underwriters commence any of these
transactions, they may discontinue them at any time.
Credit Suisse First Boston Corporation and J.P. Morgan Securities Inc.
will make securities available for distribution on the Internet through a
proprietary web site and/or a third-party system operated by Market Axess Inc.,
an Internet-based communications technology provider. Market Axess Inc. is
providing the system as a
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conduit for communications between Credit Suisse First Boston Corporation and
J.P. Morgan Securities Inc. and their respective customers and is not a party to
any transactions. Market Axess Inc., a registered broker-dealer, will receive
compensation from Credit Suisse First Boston Corporation and J.P. Morgan
Securities Inc. based on the transactions each of them conducts through the
system. Credit Suisse First Boston Corporation and J.P. Morgan Securities Inc.
will make securities available to their respective customers through the
Internet distributions, whether made through a proprietary or third-party
system, on the same terms as distributions made through other channels.
We estimate that our out-of-pocket expenses for this offering will be
approximately $ .
Credit Suisse First Boston Corporation, J.P. Morgan Securities Inc. and
certain of their affiliates and associates are customers of, including borrowers
from, engage in transactions with and/or perform services for, Popular North
America, Inc. and its affiliates in the ordinary course of business. Also, in
the ordinary course of their respective businesses, affiliates of these
underwriters engage, and may in the future engage, in commercial banking and
investment banking transactions with Popular North America, Inc. and its
affiliates. Credit Suisse First Boston Corporation and J.P. Morgan Securities
Inc. have performed investment banking services for Popular North America, Inc.
and its affiliates and have received fees for those services.
Popular Securities, Inc. is a wholly owned subsidiary of Popular, Inc.
and is a member of the National Association of Securities Dealers, Inc. The
offering is therefore being made in compliance with the applicable provisions of
NASD Conduct Rule 2720. No NASD member may sell the securities to a
discretionary account without the prior specific written approval of the
customer.
VALIDITY OF THE NOTES
The validity of the notes and guarantees will be passed upon for
Popular North America, Inc. by Sullivan & Cromwell, New York, New York, and for
the underwriters by Sidley Austin Brown & Wood LLP, New York, New York. Brunilda
Santos de Alvarez, Esq., counsel to Popular, will pass upon the validity of the
guarantees as to matters of Puerto Rico law for Popular, Inc. Sullivan &
Cromwell and Sidley Austin Brown & Wood LLP will rely as to all matters of the
laws of the Commonwealth of Puerto Rico upon the opinion of Brunilda Santos de
Alvarez, Esq. Brunilda Santos de Alvarez, Esq. owns, directly or indirectly,
5,325 shares of common stock of Popular, Inc. pursuant to Popular, Inc.'s
employee stock ownership plan and otherwise. The employee stock ownership plan
is open to all employees of Popular, Inc.
EXPERTS
The financial statements incorporated in this pricing supplement and
the accompanying prospectus and prospectus supplement by reference to Popular's
Annual Report on Form 10-K for the year ended December 31, 2000 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.
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