MTB USD Issue: Good Sentiment Indicator For Aareal, DePfa

M&T Bank issued senior unsecured on Monday (11-Mar) which is one of the first of the CRE-geared regionals to issue since the NYC Bancorp events began (31-Jan). Could be good sentiment indicator for DePfa and Aareal.

• MTB CRE gearing (as % of total loans) is above the average for a peer group of US regionals (24.6% vs. 16.4% average… NYCB is 59%) and the group does talk about local scale driving strong deposit franchise and that 11% of deposits are in NYC. Mgmt does also note <2% of total loans are in NYC but does not break out construction lending on the same basis. Reports indicate it is heavily-weighted in that market and construction is 6% of the loan book.
• MTB’s benchmark ‘29s (MTB 7.413 10/30/29) has widened c.40bp since the NYCB events began and has underperformed the US IG senior financials index by over 20bp YTD.
• The new bond (MTB 6.082 03/13/32) is only just trading and performance could be a good lead indicator of investor sentiment, relevant for DePfa, Aareal and Deutsche – three Euro issuers seen as similarly exposed.