By Stephanie N. Rotondo
Phoenix, Aug. 20 - The Department of the Treasury priced an offering of $381.5 million of series A and C fixed-rate cumulative perpetual preferred stock issued by M&T Bank Corp. under the Troubled Asset Relief Program, the agency said in a press release late Friday.
The bank registered 230,000 of the $1,000-par series A preferreds and 151,500 of the $1,000-par series C preferreds on Thursday.
The initial dividend on the preferreds (expected Baa2/BBB/BB) is 5%. On Feb. 14, 2014, the series A preferreds will increase to 9%. The series C preferreds will increase to that same dividend on Nov. 14, 2013.
The rate increase will occur assuming the bank does not redeem the preferreds before the stated conversion dates. However, the company said in its registration statement that it has agreed not to redeem the issues prior to Nov. 15, 2013 unless a regulatory capital treatment event occurs.
Additionally, the bank will seek shareholder approval of an amendment to the preferreds. If approved, the amendment will result in the dividend rising on Nov. 14, 2013 for both series to 6.375%, and the bank may only redeem the preferreds beginning Nov. 15, 2018 or within 90 days of a regulatory capital treatment event.
Dividends will be payable on the 15th of February, May, August and November beginning Nov. 15.
M&T will apply to list the securities on the New York Stock Exchange under the ticker symbols "MTBP" and "MTBPC," respectively. Settlement is expected Tuesday.
Bank of America Merrill Lynch, Sandler O'Neill + Partners, LP, RBC Capital Markets, LLC and Stifel, Nicolaus & Co., Inc. are the joint bookrunning managers. The co-managers are MR Beal & Co. and Rice Securities LLC.
Buffalo-based M&T will not receive any proceeds from the sale of these securities.
| Issuer: | M&T Bank Corp.
|
| Securities: | Series A and C fixed-rate cumulative preferred stock
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| Amount: | $381.5 million, including $230 million series A preferreds and $151.5 million series C preferreds
|
| Maturity: | Perpetual
|
| Bookrunners: | Bank of America Merrill Lynch, Sandler O'Neill + Partners, LP, RBC Capital Markets, LLC and Stifel, Nicolaus & Co., Inc.
|
| Co-managers: | MR Beal & Co. and Rice Securities LLC
|
| Dividend: | Fixed at 5% though Nov. 14, 2013, then reset to 6.375% per a pending amendment
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| Price: | Par of $1,000
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| Yield: | 5% though Nov. 14, 2013, then 6.375%
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| Call option: | On or after Nov. 15, 2018 or in the event of a regulatory capital treatment event per a pending amendment
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| Pricing date: | Aug. 17
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| Settlement date: | Aug. 21
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| Expected ratings: | Moody's: Baa2
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| Standard & Poor's: BBB
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| Fitch: BB
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| Expected listings: | NYSE: MTBP for series A preferreds
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| NYSE: MTBPC for series B preferreds
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