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EXHIBIT 5(a)
August 3, 1995
The Board of Directors
BanPonce Corporation
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
The Board of Directors
Popular International Bank, Inc.
c/o BanPonce Corporation
209 Munoz Rivera Avenue
Hato Rey, Puerto Rico 00918
The Board of Directors
BanPonce Financial Corp.
521 Fellowship Road
Mt. Laurel, New Jersey 08054
Ladies and Gentlemen:
This opinion is delivered in connection with the registration under
the Securities Act of 1933 (the "Act") of (i) senior debt securities (the
"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
Senior Debt Securities") of BanPonce Financial Corp., a Delaware corporation
("Financial"), bearing the unconditional guarantees (the "BanPonce Financial
Senior Debt Guarantees") of the Corporation, subordinated debt securities (the
"BanPonce Financial Subordinated Debt Securities") of Financial, bearing the
unconditional guarantees (the "BanPonce Financial Subordinated Debt
Guarantees") of the Corporation, and shares of preferred stock, par value $.01
per share (the "BanPonce Financial Preferred Stock") of Financial, bearing the
unconditional guarantees (the "BanPonce Financial Preferred Stock Guarantees"),
and (iii) senior debt securities (the "PIB Senior Debt Securities") of Popular
International Bank, Inc., a Puerto
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BanPonce Corporation
Popular International Bank, Inc.
BanPonce Financial Corp. -2-
Rico corporation ("PIB"), bearing the unconditional guarantees (the "PIB Senior
Debt Securities Guarantees") of the Corporation, subordinated debt securities
(the "PIB Subordinated Debt Securities") of PIB, 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") of PIB, bearing the unconditional guarantees (the "PIB Preferred Stock
Guarantees") of the Corporation (the BanPonce Senior Debt Securities, the
BanPonce Subordinated Debt Securities, the BanPonce Financial Senior Debt
Securities, the BanPonce Financial Subordinated Debt Securities, the PIB Senior
Debt Securities and the PIB Subordinated Debt Securities are sometimes
collectively referred to herein as the "Debt Securities", the BanPonce
Financial Senior Debt Guarantees, the BanPonce Financial Subordinated Debt
Guarantees, the BanPonce Financial Preferred Stock 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 "Guarantees", and the Debt Securities, the BanPonce Preferred
Stock, the BanPonce Financial 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.
I, as Counsel to the Corporation, have examined such corporate records,
certificates and other documents, and such questions of law, as I have
considered necessary or appropriate for the purposes of this opinion. On the
basis of such examination, I advise you that, in my opinion:
(i) Each of the Corporation and PIB has been duly incorporated and
is an existing corporation in good standing under the laws of the Commonwealth
of Puerto Rico.
(ii) When the registration statement relating to the Securities and
the Guarantees (the "Registration Statement") has become effective under the
Act, the terms of the BanPonce Senior Debt Securities and of their issuance and
sale have been duly established in conformity with the indenture relating to
the BanPonce Senior Debt Securities (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 restriction imposed by any court or governmental body having
jurisdiction over the Corporation, and the BanPonce Senior Debt Securities have
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BanPonce Corporation
Popular International Bank, Inc.
BanPonce Financial Corp. -3-
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.
(iii) 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 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.
(iv) When the Registration Statement has become effective under the
Act, the terms of the BanPonce Financial Senior Debt Securities and of the
BanPonce Financial Senior Debt Guarantees and of their issuance and sale have
been duly established in conformity with the indenture relating to the BanPonce
Financial Senior Debt Securities (the "BanPonce Financial 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 Financial or the 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 Senior Debt Securities have been duly executed and
authenticated, and the BanPonce Financial Senior Debt Guarantees have been duly
executed, each in accordance
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BanPonce Corporation
Popular International Bank, Inc.
BanPonce Financial Corp. -4-
with the BanPonce Financial Senior Indenture, and the BanPonce Financial Senior
Debt Securities and the BanPonce Financial Senior Debt Guarantees have been
issued and sold as contemplated in the Registration Statement, the BanPonce
Financial Senior Debt Securities will constitute valid and legally binding
obligations of Financial and the BanPonce Financial Senior Debt Guarantees will
constitute valid and legally binding obligations of the Corporation, in each
case subject to bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
(v) When the Registration Statement has become effective under the
Act, the indenture relating to the BanPonce Financial Subordinated Debt
Securities (the "BanPonce Financial Subordinated Indenture") has been duly
executed and delivered, the terms of the BanPonce Financial Subordinated Debt
Securities and of the BanPonce Financial Subordinated Debt Guarantees and of
their issuance and sale have been duly established in conformity with the
BanPonce Financial 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 Financial or the 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
Subordinated Debt Securities have been duly executed and authenticated, and the
BanPonce Financial Subordinated Debt Guarantees have been duly executed, each
in accordance with the BanPonce Financial Subordinated Indenture, and the
BanPonce Financial Subordinated Debt Securities and the BanPonce Financial
Subordinated Debt Guarantees have been issued and sold as contemplated in the
Registration Statement, the BanPonce Financial Subordinated Debt Securities
will constitute valid and legally binding obligations of Financial and the
BanPonce Financial Subordinated Debt Guarantees will constitute valid and
legally binding obligations of the Corporation, in each case subject to
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(vi) 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
Debt
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BanPonce Corporation
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BanPonce Financial Corp. -5-
Securities and of the PIB Senior Debt Securities Guarantees and of their
issuance and sale have been duly established in conformity with the PIB Senior
Indenture so as not to violate any applicable law or result in a default under
or breach of any agreement or instrument binding upon PIB or the Corporation
and so as to comply with any requirement or restriction imposed by any court or
governmental body having jurisdiction over PIB or the Corporation, the PIB
Senior Debt Securities have been duly executed and authenticated and the PIB
Senior Debt Securities Guarantees have been duly executed, each in accordance
with the PIB Senior Indenture, and the PIB Senior Debt Securities and the PIB
Senior Debt Securities Guarantees have been issued and sold as contemplated in
the Registration Statement, the PIB Senior Debt Securities will constitute
valid and legally binding obligations of PIB and the PIB Senior Debt 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.
(vii) 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 the PIB Subordinated Debt Securities
Guarantees and of their issuance and sale have been duly established in
conformity with the PIB Subordinated Indenture so as not to violate any
applicable law or result in a default under or breach of any agreement or
instrument binding upon PIB or the Corporation and so as to comply with any
requirement or restriction imposed by any court or governmental body having
jurisdiction over PIB or the Corporation, and the PIB Subordinated Debt
Securities have been duly executed and authenticated and the PIB Subordinated
Debt Securities Guarantees have been duly executed, each in accordance with the
PIB Subordinated Indenture, and the PIB Subordinated Debt Securities and the
PIB Subordinated Debt Securities Guarantees 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 obligations of the Corporation, in each case subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and similar
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BanPonce Corporation
Popular International Bank, Inc.
BanPonce Financial Corp. -6-
laws of general applicability relating to or affecting creditors' rights and to
general equity principles.
(viii) When the Registration Statement has become effective under the
Act, a certificate with respect to the BanPonce Preferred Stock has been duly
filed and recorded with the Department of State of the Commonwealth of Puerto
Rico as required by the General Corporation Law of the Commonwealth of Puerto
Rico, the terms of the BanPonce Preferred Stock and of its issue and sale have
been duly established in conformity with the Corporation's restated certificate
of incorporation so as not to violate any applicable law or result in a default
under or breach of any agreement or instrument binding upon the Corporation and
so as to comply with any requirement or restriction imposed by any court or
governmental body having jurisdiction over the Corporation, all regulatory
consents or approvals for the issuance and sale of the BanPonce Preferred Stock
have been obtained and the BanPonce Preferred Stock has been duly issued and
sold as contemplated by the Registration Statement, the BanPonce Preferred
Stock will be validly issued, fully paid, and nonassessable.
(ix) When the Registration Statement has become effective under the
Act, a certificate with respect to the PIB Preferred Stock has been duly filed
and recorded with the Department of State of the Commonwealth of Puerto Rico as
required by the General Corporation Law of the Commonwealth of Puerto Rico, the
terms of the PIB Preferred Stock and of its issue and sale have been duly
established in conformity with PIB's certificate of incorporation so as not to
violate any applicable law or result in a default under or breach of any
agreement or instrument binding upon PIB or the Corporation and so as to comply
with any requirement or restriction imposed by any court or governmental body
having jurisdiction over PIB or the Corporation, all regulatory consents or
approvals for the issuance and sale of the PIB Preferred Stock and for the
issuance of the PIB Preferred Stock Guarantees have been obtained, and the PIB
Preferred Stock has been duly issued and sold as contemplated by the
Registration Statement, the PIB Preferred Stock will be validly issued, fully
paid and nonassessable, and when the terms of the PIB Preferred Stock
Guarantees have been duly approved by the Board of Directors or other
authorized officials of the Corporation and the PIB Preferred Stock Guarantees
have been duly executed, the PIB Preferred Stock Guarantees will constitute
valid and legally binding obligations of the Corporation, subject to
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Popular International Bank, Inc.
BanPonce Financial Corp. -7-
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
similar laws of general applicability relating to or affecting creditors'
rights and to general equity principles.
(x) When the Registration Statement has become effective under the
Act, a certificate of designations with respect to the BanPonce Financial
Preferred Stock has been duly filed and recorded with the Secretary of State of
the State of Delaware, the terms of the BanPonce Financial Preferred Stock and
of its issue and sale have been duly established in conformity with Financial's
certificate of incorporation, as amended, so as not to violate any applicable
law or result in a default under or breach of any agreement or instrument
binding upon Financial or the 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, all regulatory consents or
approvals for the issuance and sale of the BanPonce Financial Preferred Stock
and for the issuance of the BanPonce Financial Preferred Stock Guarantees have
been obtained, when the terms of the BanPonce Financial Preferred Stock
Guarantees have been duly approved by the Board of Directors or other
authorized officials of the Corporation and the BanPonce Preferred Stock
Guarantees have been duly executed, and the BanPonce Financial Preferred Stock
and the BanPonce Financial Preferred Stock Guarantees have been duly issued and
sold as contemplated by the Registration Statement, the BanPonce Financial
Preferred Stock Guarantees will constitute valid and legally binding
obligations of the Corporation, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles.
I note that, as of the date of this opinion, a judgment for money in
an action based on a Debt Security denominated 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
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a judgment on a Debt Security, or on a related Guarantee, would be required
under Section 27 of the New York Judiciary Law to render such judgment in the
foreign currency in which the Debt Security is denominated, and such judgment
would be converted into United States dollars at the exchange rate prevailing
on the date of entry of the judgment.
The foregoing opinion is limited to the Federal laws of the United
States, the General Corporation Law of the State of Delaware, the laws of the
State of New York and the Commonwealth of Puerto Rico, and I am expressing no
opinion as to the effect of the laws of any other jurisdiction. With respect
to all matters of the laws of the State of New York, I have relied upon the
opinion, dated the date hereof, of Sullivan & Cromwell, and my opinion is
subject to the same assumptions, qualifications and limitations with respect to
such matters as are contained in such opinion of Sullivan & Cromwell.
Also, I have relied as to certain matters on information obtained from
public officials, officers of the Corporation, Financial and PIB, and other
sources believed by me to be responsible, and I have assumed that each of the
BanPonce Senior Indenture and the BanPonce Financial Senior Indenture has been
duly authorized, executed and delivered by the respective Trustee thereunder,
assumptions which I have not independently verified.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to me under the heading "Validity
of Offered Securities" in the Prospectus contained in the Registration
Statement. In giving such consent, I do not thereby admit that I am in the
category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
/s/ Brunilda Santos de Alvarez
Brunilda Santos de Alvarez