Fitch affirmed First BanCorp.'s B+ long-term issuer default rating after the company said it was acquiring Banco Santander Puerto Rico in a $1.1 billion all-cash deal.
The rating agency said the affirmation is in line with its expectations that the Puerto Rico-based bank would make deals to expand its franchise and gain more operating efficiencies. Fitch said the deal would result in an increase in loan and deposit market share to about 30% and 20% from 19% and 11%, respectively.
Fitch also placed Banco Santander Puerto Rico's BBB+ long-term and F2 short-term issuer default ratings on Rating Watch Negative with expectations of a "multi-notch downgrade" given the difference of its ratings and of parent company Santander Holdings USA Inc. The rating watch status will be resolved upon deal completion, which is expected in the second quarter of 2020.