M&T Bank announced that CME Term SOFR will be the replacement reference rate for certain outstanding floating rate and fixed-to-floating rate debt securities, preferred stock and trust preferred securities issued by M&T and certain of its subsidiaries that currently use three-month U.S. dollar LIBOR as the reference rate and that are governed by U.S. law or the law of a U.S. state. The transition will be effective after June 30.
In March 2021, the UK Financial Conduct Authority announced that after June 30, 2023, one-month, three-month, six-month and 12-month USD LIBOR settings either will cease publication or no longer be representative.
In connection with the cessation of USD LIBOR in the United States, the Adjustable Interest Rate Act (the LIBOR Act) was passed and subsequently implemented by regulations issued by the board of governors of the Federal Reserve System (the LIBOR rule) to facilitate the transition of certain U.S. law-governed legacy contracts through a statutory replacement of USD LIBOR with a SOFR-based replacement rate. The LIBOR rule also establishes relevant tenor spread adjustments applicable to the SOFR-based replacement rates and provides for such technical, administrative and/or operational change, alterations or modifications necessary to the implementation, administration and calculation of the replacement reference rate.
