NEW YORK ( The Deal ) -- As part of a larger effort to shore up its balance sheet, troubled bank operator Doral Financial ( DRL ) has sold a $242.1 million portfolio of mortgage loans and servicing rights to FirstBank Puerto Rico in exchange for the lender canceling a $234.1 million loan. The San Juan, Puerto Rico-based company, which runs Doral Bank, is evaluating all strategic alternatives to boost its capital position in the wake of a dispute with Puerto Rico's government over $229.88 million in potential tax refunds, which accounted for 43% of the bank's Tier 1 Capital. The Federal Deposit Insurance Corp. sent a letter to Doral Bank on May 1, asserting that the bank may no longer count some or all of the expected tax refunds from the Treasury as Tier 1 capital, and gave the bank 120 days to submit a new capitalization plan.