Treasury offers $381.5 million M&T Bank series A, C TARP preferreds

By Stephanie N. Rotondo

Phoenix, Aug. 17 - The Department of the Treasury has begun an offering of $381.5 million of series A and C fixed-rate cumulative perpetual preferred shares issued by M&T Bank Corp. under the Troubled Asset Relief Program, the agency said in a press release on Friday.

The bank registered $230 million of the $1,000-par series A preferreds and $151.5 million of the $1,000-par series C preferreds on Thursday.

The initial dividend on the preferreds is 5%. On Nov. 14, 2013, the series C preferreds will increase to 9%. The series A preferreds will convert to that same dividend on Feb. 14, 2014.

The rate increase will occur assuming the bank does not redeem the preferreds before the stated conversion dates. However, the bank said in its registration statement that it agreed not to redeem the issues prior to Nov. 15, 2013 unless a regulatory capital treatment event occurs.

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, and the bank may only redeem the preferreds beginning Nov. 15, 2018 or within 90 days of a regulatory capital treatment event.

M&T will apply to list the securities on the New York Stock Exchange under the ticker symbols "MTBP" and "MTBPC," respectively.

Bank of America Merrill Lynch, Sandler O'Neill + Partners, LP and Stifel Nicolaus & Co., Inc. are the joint bookrunning managers, M&T said in a regulatory filing on Friday.

Buffalo-based M&T will not receive any proceeds from the sale of these securities.

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