LIBOR Transition

New lending based on LIBOR will cease by the end of 2021. Stay up to date on the latest developments, key dates and how M&T is preparing for the transition.

M&T Bank has created a dedicated LIBOR Transition Office.

With a dedicated LIBOR Transition Office, M&T is committing extensive resources toward making the necessary investments in systems, personnel and processes required to develop best-in-class client solutions. Understanding how this impacts M&T Bank clients with LIBOR-priced credit facilities is important, and we are here to help you navigate your options. 

We'll be sure to provide updates on the LIBOR transition from the Alternative Reference Rate Committee (ARRC), convened by the Federal Reserve Board and Federal Reserve Bank of New York, as well as guidance on its recommended alternative – the Secured Overnight Financing Rate (SOFR).

The information made publicly available via the resources referenced on this page are for informational purposes only, and should NOT be viewed or construed as legal, accounting, tax or other professional advice. Readers should consult with their own professional advisors to discuss any information provided herein. M&T Bank is not endorsing any third party sources cited herein, and makes no representations or warranties about the accuracy or completeness of any information contained herein.

If you have questions, contact your M&T Relationship Manager.


Navigating the Transition from LIBOR

View our LIBOR resources and insights.

Life After LIBOR

What the anticipated replacement of LIBOR as a benchmark index means for you, your business and your banking relationship.

Read More >

Resources & Insights

Comparing LIBOR to SOFR

There are some key differences between LIBOR and SOFR which are important to understand.
Read Article >
Resources & Insights

LIBOR Foundational Knowledge

The market needs a new benchmark interest rate. Learn the recommended alternative for USD LIBOR and what other rates were considered.
Read Article >

LIBOR Frequently Asked Questions

The London Interbank Offered Rate (LIBOR) is intended to represent the average interest rate at which a certain group of contributing global banks can obtain funding in the London interbank market. For decades, LIBOR has been and continues to be the primary global short-term interest rate benchmark. US Dollar LIBOR is used by M&T Bank and other financial institutions as a measure of its short-term cost of funds.

Global money markets were disrupted and fundamentally changed following the Great Recession, which began with the 2007 U.S. housing market downturn and prompted the Federal Reserve Bank and other central banks to intervene. Consequently, the number of interbank funding transactions in the LIBOR market declined, and the basis for determining LIBOR was and remains increasingly based on “expert judgment” rather than actual transactions. In addition, several large global banks involved with providing data used to set LIBOR have been accused of manipulating LIBOR during the same time-period. These issues have led bank regulators to begin looking for a replacement for LIBOR.

M&T Bank will not be making any US LIBOR loans after the end of 2021.

SOFR (Secured Overnight Financing Rate) was selected as the best alternative to US dollar LIBOR by ARRC. M&T currently offers Daily Simple SOFR and 1-Month Term SOFR.

At a glance:

  • Daily Simple SOFR: Resets each day and offers rate flexibility for facilities that have frequent principal activity. Daily SOFR is underpinned by one of the deepest and most active financial markets—the US Treasury repo market, which has more than $1 trillion in daily volume.
  • 1-Month Term SOFR: Resets each month and offers the convenience of a term rate where the interest rate for the entire payment period is  known at the beginning of the payment period. Term SOFR is derived from the SOFR futures market.  
Reach out to your Relationship Manager to learn more. 

An existing LIBOR loan will cease to be a LIBOR loan when LIBOR no longer exists (i.e. after June 30, 2023). What happens next depends on when the loan was originated and what, if any, remediating steps were taken prior to LIBOR cessation.

Loans with hardwired fallback language

  • Loans with hardwired fallback language have a clear roadmap to replace LIBOR with an alternative reference rate (e.g. Term SOFR) upon the first interest rate reset following LIBOR’s cessation (scheduled for June 2023).
  • Many newer loans were originated with hardwired fallback language that addresses LIBOR cessation in the original loan documents.
  • Older loans must be amended to include hardwired fallback language addressing LIBOR cessation. M&T has begun the process of reaching out to Commercial clients with impacted legacy LIBOR loans to amend the loan documents accordingly. This process will be ongoing through 2022.

Loans without hardwired fallback language

  • If your impacted legacy LIBOR loan has not been amended to include hardwired fallback language prior to LIBOR cessation, your loan rate will likely convert to a Prime-based rate (as per the terms of your legacy loan documents) upon the first interest rate reset following LIBOR’s cessation (scheduled for June 2023). This may result in a rate increase.
  • To achieve an outcome that more closely preserves the economics of the loan, your loan documents must be amended to either (a) convert immediately to a replacement index, or (b) include new “hardwired” fallback language that will provide for an automatic future conversion to a preferable replacement index  following LIBOR’s discontinuance.
  • M&T’s LIBOR Transition Office is providing clients with the opportunity to amend impacted legacy LIBOR loans to include hardwired fallback language. Our Commercial Relationship Managers have received training on the LIBOR Transition and are ready to offer guidance and resources to make the amendment process straightforward and simple.

Note on loans hedged with an Interest Rate Derivative

  • If your existing LIBOR loan is hedged (with a swap, cap, collar, etc..), your hedging agreement will also need to be amended. This can be accomplished by adhering to the ISDA 2020 IBOR Fallbacks Protocol, which effectively incorporates a hardwired fallback to a replacement index and rate. M&T has already adhered to the Protocol. You should consider doing so as well – after consulting with your own legal, tax, financing and accounting advisors.

Additional ARRC Resources

You can expect to continue to hear more from M&T Bank and your Relationship Manager.

All loans, lines of credit, and all terms referenced herein are subject to receipt of a complete M&T application, credit approval and other conditions. Other terms, conditions, fees and restrictions may apply.​
Unless otherwise specified, all advertised offers and terms and conditions of accounts and services are subject to change at any time without notice. After an account is opened or service begins, it is subject to its features, conditions and terms, which are subject to change at any time in accordance with applicable laws and agreements. Please contact an M&T representative for full details.