Moody's lowers M&T Bank

Moody's Investors Service said it downgraded M&T Bank Corp.'s issuer rating to A3 from A2, its senior unsecured bonds to A3 from A2, the preferred stock and trust preferreds of its subsidiaries to Baa1 from A3 and Allfirst Financial Inc.'s subordinated bonds to Baa1 from A3.

It also downgraded Manufacturers and Traders Trust Co.'s issuer rating and other senior unsecured obligation rating to A2 from A1 and its subordinated bonds to A3 from A2.

M&T Bank's Prime-1 short-term ratings were affirmed.

This concludes the review for possible downgrade that began on March 12, and the outlook is negative.

The agency said the downgrade and negative outlook reflect its view that M&T's financial strength, particularly its capital levels and earnings generation, are likely to be pressured by deterioration in its real estate and consumer loan portfolios and its securities portfolios.

Notwithstanding the downgrade, Moody's said it views M&T as continuing to operate a solid and sustainable regional bank franchise in a footprint that spans seven Mid-Atlantic States and the District of Columbia.

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