Moody’s cuts M&T, Wilmington Trust

Moody's Investors Service said it downgraded Manufacturers and Traders Trust Co.’s long-term deposits to Aa3 from Aa2, senior unsecured debt to A3 from A2 and short-term bank note program rating to provisional Prime-2 from provisional Prime-1.

The issuer rating of Wilmington Trust Co. was downgraded to A3 from A2. The long-term deposit rating of Wilmington Trust, NA was downgraded to Aa3 from Aa2.

All ratings of M&T Bank Corp., as well as the a2 standalone baseline credit assessment of Manufacturers and Traders and Wilmington Trust, NA, were affirmed.

The outlook is stable.

Moody’s said the downgrade of the bank-level deposit and senior ratings was driven by the lower proportion of unsecured long-term debt in M&T's liability structure, which increases the potential loss severity for bank-level creditors. The composition of a bank's liability structure is a key element in Moody's Advanced Loss Given Failure framework, which is a component of Moody's rating methodology for banks.

The agency said it does not expect that in the near-term, M&T will issue the volume of debt required to reduce the loss severity for bank-level creditors.

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