Popular previously disclosed in a press release on January 9, 2020 its plan to repurchase up to $500 million of its common stock as part of its planned capital actions for 2020.
Under the terms of the ASR Agreement, on February 3, 2020 the Corporation will make an initial payment of $500 million and receive an initial delivery of 7,055,919 shares of Popular’s Common Stock (the “Initial Shares”).
The transaction is being accounted for as a treasury stock transaction. Furthermore, as a result of the receipt of the Initial Shares, the Corporation recognized in shareholders’ equity approximately $400 million in treasury stock and $100 million as a reduction of capital surplus. Upon the final settlement of the ASR Agreement, the Corporation expects to further adjust its treasury stock and capital surplus accounts to reflect the final delivery or receipt of cash or shares, which will depend on the volume-weighted average price of the Corporation’s common stock during the term of the ASR Agreement, less a discount. The final settlement of the ASR Agreement is expected to occur no later than the fourth quarter of 2020.