American Banker interviewed Manatt's Craig Miller, co-chair of the firm's Financial Services and Banking practice, for an article on Doral Financial's increasingly cloudy future.
As reported by American Banker, the Federal Deposit Insurance Corp. recently hit Doral with a prompt corrective action directive, ordering them to quickly resolve longstanding capital woes without relying on a $230 million tax refund from the Puerto Rican government. Though it is rare for a bank to overcome a PCA, industry insiders told the publication that it is not completely unheard of. Doral has a few options, including raising capital, but this could be tricky given its unresolved refund and uncertain future.
"A lot will depend on how investors evaluate Doral's ability to recover the money from the government," said Miller. Recapitalizing "is still possible, but it will be expensive and at a significant dilution."
Read the article here.