Puerto Rico's Doral Financial Corp., which ratings agencies have said may be near bankruptcy, is demanding Puerto Rico's Treasury Department pay it $230 million immediately.
Doral told Treasury Department Secretary Melba Acosta Febo in a letter on Friday that, according to a 2012 closing agreement, the commonwealth owed it $230 million.
In Friday's letter Doral chief executive officer Glen Wakeman wrote that Doral had also made this claim in a April 23 letter to Acosta Febo.
In April the Federal Deposit Insurance Corp. told Doral that it could not count the $289 million of receivables from the commonwealth government as Tier 1 capital. The corporation had included it in its $679 million of Tier 1 capital.
The ruling will force the bank to either increase capital within 120 days or submit a contingency plan to the FDIC to sell, merge or liquidate, Joseph Pucella, vice president at Moody's Investors Service wrote Friday.
Doral Financial Corp. is the parent company of Doral Bank, which operates in Puerto Rico and a few states in the United States.
On Friday morning Moody's downgraded a bond and a note issued by the Puerto Rico Conservation Trust Fund to C to Caa3. C is Moody's lowest possible rating. Doral Financial Corp. is the securities' obligor.
Doral Financial Corp. has over $150 million in outstanding municipal debt, issued through Puerto Rico public conduit entities.
The Treasury Department will be answering Doral’s letter in the next few days, a Treasury spokeswoman said. The Treasury is unable to provide further comments regarding this matter due to the fact that the Puerto Rico Taxpayers’ Bill of Rights protects the confidentiality of this information, she said.
The FDIC declined to comment.
