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EXHIBIT 5(b)
July 19, 1994
BanPonce Corporation,
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918.
Popular International Bank Inc.,
c/o BanPonce Corporation,
209 Munoz Rivera Avenue,
Hato Rey, Puerto Rico 00918.
BanPonce Financial Corp.,
c/o CT Corporation,
1209 Orange Street,
Wilmington, Delaware 19801.
Ladies and Gentlemen:
This opinion is delivered in connection with the registration under
the Securities Act of 1933 (the "Act") of (i) senior debt securities (the
"BanPonce Senior Debt Securities"), subordinated debt securities (the "BanPonce
Subordinated Debt Securities") and preferred stock, without par value (the
"BanPonce Preferred Stock"), of BanPonce Corporation, a Puerto Rico corporation
(the "Corporation"), (ii) senior debt securities (the "BanPonce Financial Debt
Securities") of BanPonce Financial Corp. ("Financial"), a
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Delaware corporation, bearing the unconditional guarantees (the "BanPonce
Financial Guarantees") of the Corporation, and (iii) senior debt securities
(the "PIB Senior Debt Securities") bearing the unconditional guarantees (the
"PIB Senior Debt Securities Guarantees") of the Corporation, subordinated debt
securities (the "PIB Subordinated Debt Securities") bearing the unconditional
guarantees (the "PIB Subordinated Debt Securities Guarantees") of the
Corporation and preferred stock, par value $25.00 per share (the "PIB Preferred
Stock"), bearing the unconditional guarantees (the "PIB Preferred Stock
Guarantees") of the Corporation, of Popular Bank International Inc. ("PIB"), a
Puerto Rico corporation (the BanPonce Senior Debt Securities, the BanPonce
Subordinated Debt Securities, the BanPonce Financial Debt Securities, the PIB
Senior Debt Securities and the PIB Subordinated Debt Securities are sometimes
collectively referred to herein as the "Debt Securities"; the BanPonce
Financial Guarantees, the PIB Senior Debt Securities Guarantees, the PIB
Subordinated Debt Securities Guarantees and the PIB Preferred Stock Guarantees
are sometimes collectively referred to herein as the
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"Guarantees"; and the Debt Securities, the BanPonce Preferred Stock and the PIB
Preferred Stock are sometimes collectively referred to herein as the
"Securities"). The Securities are limited to an aggregate initial offering
price not to exceed $500,000,000. We, as your counsel, have examined such
corporate records, certificates and other documents, and such questions of law,
as we have considered necessary or appropriate for the purposes of this
opinion. On the basis of such examination, we advise you that, in our opinion:
(i) When the registration statement relating to the Securities and
the Guarantees (the "Registration Statement") has become effective under the
Act, the indenture relating to the BanPonce Senior Debt Securities (the
"BanPonce Senior Indenture") has been duly executed and delivered, the terms of
the BanPonce Senior Debt Securities and of their issuance and sale have been
duly established in conformity with the BanPonce Senior Indenture so as not to
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon the Corporation and so as to comply with
any requirement or
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restriction imposed by any court or governmental body having jurisdiction over
the Corporation, and the BanPonce Senior Debt Securities have been duly
executed and authenticated in accordance with the BanPonce Senior Indenture and
issued and sold as contemplated in the Registration Statement, the BanPonce
Senior Debt Securities will constitute valid and legally binding obligations of
the Corporation, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating
to or affecting creditors' rights and to general equity principles.
(ii) When the Registration Statement has become effective under the
Act, the indenture relating to the BanPonce Subordinated Debt Securities (the
"BanPonce Subordinated Indenture") has been duly executed and delivered, the
terms of the BanPonce Subordinated Debt Securities and of their issuance and
sale have been duly established in conformity with the BanPonce Subordinated
Indenture so as not to violate any applicable law or result in a default under
or breach of any agreement or instrument binding upon the Corporation and so as
to comply with any requirement or
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restriction imposed by any court or governmental body having jurisdiction over
the Corporation, and the BanPonce Subordinated Debt Securities have been duly
executed and authenticated in accordance with the BanPonce Subordinated
Indenture and issued and sold as contemplated in the Registration Statement,
the Banponce Subordinated Debt Securities will constitute valid and legally
binding obligations of the Corporation, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
(iii) When the Registration Statement has become effective under the
Act, the indenture relating to the BanPonce Financial Debt Securities (the
"BanPonce Financial Indenture") has been duly executed and delivered, the terms
of the BanPonce Financial Debt Securities and of their issuance and sale have
been duly established in conformity with the BanPonce Financial Indenture so as
not to violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon Financial or the
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Corporation and so as to comply with any requirement or restriction imposed by
any court or governmental body having jurisdiction over Financial or the
Corporation, the BanPonce Financial Debt Securities have been duly executed and
authenticated, and the BanPonce Financial Guarantees have been duly executed,
each in accordance with the BanPonce Financial Indenture, and the BanPonce
Financial Debt Securities have been issued and sold as contemplated in the
Registration Statement, the BanPonce Financial Debt Securities will constitute
valid and legally binding obligations of Financial and the BanPonce Financial
Guarantees will constitute valid and legally binding obligations of the
Corporation, in each case subject to the bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
(iv) When the Registration Statement has become effective under the
Act, the indenture relating to the PIB Senior Debt Securities (the "PIB Senior
Indenture") has been duly executed and delivered, the terms of the PIB Senior
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Debt Securities and of their issuance and sale have been duly established in
conformity with the PIB Senior Indenture so as not to violate any applicable
law or result in a default under or breach of any agreement or instrument
binding upon PIB or the Corporation and so as to comply with any requirement or
restriction imposed by any court or governmental body having jurisdiction over
PIB or the Corporation, the PIB Senior Debt Securities have been duly executed
and authenticated and the PIB Senior Debt Securities Guarantees have been duly
executed, each in accordance with the PIB Senior Indenture, and the PIB Senior
Debt Securities have been issued and sold as contemplated in the Registration
Statement, the PIB Senior Debt Securities will constitute valid and legally
binding obligations of PIB and the PIB Senior Debt Securities Guarantees will
constitute valid and legally binding obligations of the Corporation, in each
case subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
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(v) When the Registration Statement has become effective under the
Act, the indenture relating to the PIB Subordinated Debt Securities (the "PIB
Subordinated Indenture") has been duly executed and delivered, the terms of the
PIB Subordinated Debt Securities and of their issuance and sale have been duly
established in conformity with the PIB Subordinated Indenture so as not to
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon PIB or the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over PIB or the Corporation, the PIB Subordinated Debt
Securities have been duly executed and authenticated and the PIB Subordinated
Debt Securities Guarantees have been duly executed, each in accordance with the
PIB Subordinated Indenture, and the PIB Subordinated Debt Securities have been
issued and sold as contemplated in the Registration Statement, the PIB
Subordinated Debt Securities will constitute valid and legally binding
obligations of PIB and the PIB Subordinated Debt Securities Guarantees will
constitute valid and legally binding
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obligations of the Corporation, in each case subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to general equity
principles.
We note that, as of the date of this opinion, a judgment for money in
an action based on a Debt Security denominated in a foreign currency or
currency unit, or on a related Guarantee, in a Federal or state court in the
United States ordinarily would be enforced in the United States only in United
States dollars. The date used to determine the rate of conversion of the
foreign currency or currency unit in which a particular Debt Security is
denominated into United States dollars will depend on various factors, including
which court renders the judgment. In the case of a Debt Security denominated
in a foreign currency, or a related Guarantee, a state court in the State of
New York rendering a judgment on a Debt Security, or on a related Guarantee,
would be required under Section 27 of the New York Judiciary Law to render such
judgment in the foreign currency in which the Debt Security is denominated, and
such
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judgment would be converted into United States dollars at the exchange rate
prevailing on the date of entry of the judgment.
The foregoing opinion is limited to the Federal laws of the United
States, the laws of the State of New York and the Commonwealth of Puerto Rico,
and the General Corporation Law of the State of Delaware, and we are expressing
no opinion as to the effect of the laws of any other jurisdiction. With
respect to all matters of the laws of the Commonwealth of Puerto Rico, we have
relied upon the opinion, dated the date hereof, of Brunilda Santos de Alvarez,
Counsel to the Corporation, and our opinion is subject to the same assumptions,
qualifications and limitations with respect to such matters as are contained in
such opinion of Brunilda Santos de Alvarez.
Also, we have relied as to certain matters on information obtained
from public officials, officers of the Corporation, Financial and PIB, and
other sources believed by us to be responsible.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the
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references to us under the heading "Validity of Offered Securities" in the
Prospectus contained in the Registration Statement. In giving such consent, we
do not thereby admit that we are in the category of persons whose consent is
required under Section 7 of the Act.
Very truly yours,
/s/ SULLIVAN & CROMWELL