Terms

Series

6.375% Noncumulative Monthly Income Preferred Stock, 2003 Series A

Liquidation Preference

$25.00

Coupon Rate

6.375%

Rate Type

Fixed

Annual Dividend

$1.59

Payment Frequency

Monthly

Cumulative

No

Perpetual

Yes

Convertible

No

Callable

Yes

First Call Date

March 31, 2008

First Call Price

$25.50

Redemption Notice Period

30 days

Capital Stack Ranking

Junior To: All Debt Obligations And Creditors Of Popular, Inc., Any Equity Securities Expressly Ranking Senior To The 2003 Series A Preferred Stock (Requires 2/3 Holder Consent To Issue); Pari Passu With: All Equity Securities Expressly Ranking On A Parity With The 2003 Series A Preferred Stock; Senior To: Common Stock Of Popular, Inc., Series A Participating Cumulative Preferred Stock, All Equity Securities Ranking Junior To The 2003 Series A Preferred Stock

Regulatory (Basel III) Call

No

Tax Classification

Other

Qualifies for QDI

No

Qualifies for DRD

No

Shares Offered

6,500,000

Prospectus Summary

Popular, Inc. — the largest locally based financial institution in Puerto Rico and parent of Banco Popular de Puerto Rico — is offering 6,500,000 shares of its 6.375% Noncumulative Monthly Income Preferred Stock, 2003 Series A, at $25.00 per share (liquidation preference $25.00). This is a direct preferred share (not a depositary share). The stock pays a fixed annual dividend of $1.59375 per share ($0.1328125 monthly) on the last business day of each month, beginning March 31, 2003. Critically, dividends are non-cumulative: if the board omits a monthly dividend, that payment is permanently forfeited and investors have no claim to it in any future period. The 2003 Series A Preferred Stock ranks senior to Popular, Inc.'s common stock and to the Series A Participating Cumulative Preferred Stock for both dividends and liquidation, but it is junior to all of Popular, Inc.'s debt obligations and creditors. Because this is a holding company issuance, investors are structurally subordinated to all obligations at the subsidiary level, including depositors and creditors of Banco Popular de Puerto Rico — the primary source of cash flow for Popular, Inc. The Federal Reserve Board must approve any redemption; it will ordinarily require that proceeds come from new common or perpetual preferred stock, or that the Fed determines Popular's condition warrants capital reduction. There is no automatic regulatory capital event call provision. At the $25.00 offering price, the effective yield is 6.375% annually. Dividends are paid monthly on the last calendar day of each month, with a record date of the 15th of the dividend month. For U.S. mainland investors, dividends are sourced from Puerto Rico and subject to a 10% Puerto Rico withholding tax; the standard U.S. qualified dividend income (QDI) or dividends-received deduction (DRD) treatment is not explicitly confirmed. The dividend stopper provision blocks distributions on common stock and junior securities if Popular, Inc. has not paid 12 prior monthly dividends on this series in full, providing a degree of protection — though the non-cumulative nature means any missed payments themselves are gone permanently.

Summarized from the SEC prospectus filing.

Distribution History

Subsequent Call Schedule

• Date2009-03-31

  Price25.25
• Date2010-03-31

  Price25.0

Ranking vs. Other Preferreds

Dividend Stopper Provisions

Dividend Stopper Description

If Popular, Inc. has not paid 12 months of dividends on the 2003 Series A Preferred Stock, it is blocked from paying dividends on common stock or any junior stock until those arrears are cured.

Div Score Breakdown

Reinvesty's multi-factor safety analysis for this preferred, composite score: 75 (Strong)