(The following statement was released by the rating agency)\
Aug 28 - Standard & Poor's Ratings Services today said its ratings on M&T Bank Corp. (A-/Stable/A-2) are unaffected by the bank's agreement to purchase Hudson City Bancorp (unrated) for approximately $3.7 billion. The bank expects the acquisition to close by April 1, 2013, pending regulatory approval. In our view, the positive aspects of the acquisition, including sustained higher risk-adjusted capital (RAC) ratios, more than offset execution risk. The acquisition will broaden M&T's retail footprint in the New York City metropolitan area (NYC). Hudson City's 135 branches are located primarily in New Jersey, an affluent market where M&T has not had a retail presence. This will link M&T's Northeastern and Mid-Atlantic retail franchises, which stretch from Upstate New York to the Washington, DC metropolitan area. It will also provide an attractive vehicle for M&T to fund its NYC market commercial loans. We expect the acquisition to boost M&T's capital over our forecast period (18-24 months), which would raise the bank's RAC ratio, based on our framework, to the mid-7% area. (Based on our criteria, we consider a RAC ratio of 7%-10% to be "adequate.") However, we note that M&T's projected RAC ratio remains toward the low end of our "adequate" category, and we recognize that capital ratios have historically been lower than those of regional bank peers. Still, we expect that M&T will continue to build its capital ratios to meet expected Basel III requirements, further solidifying its capital position. Our current rating and outlook on M&T partly depend on the bank's ability to successfully execute the merger as planned. This will be M&T's largest acquisition to date, with the bank's total assets expected to increase by about one-third following its planned restructuring of Hudson City's balance sheet. This restructuring involves monetizing Hudson City's $13 billion investment portfolio and unwinding a similar amount of high-cost wholesale funding. In our view, this could entail some market risk, even though Hudson City's investment portfolio is not complex and is readily marketable. We expect M&T to complete the restructuring within three months of closing. We also believe the acquisition will reduce M&T's asset-sensitive interest rate risk posture somewhat by materially increasing the proportion of longer-term fixed rate assets on its balance sheet. Nonetheless, we expect that M&T will retain an asset-sensitive balance sheet at closing and that the average life of M&T's loan book should decline if Hudson City's mortgage portfolio runs off as forecasted. In addition, over the longer term, we recognize the challenges inherent in converting Hudson City's thrift banking model to commercial banking. In particular, Hudson City's core deposits consist of relatively high-cost retail certificates of deposit, which we consider a more volatile source of funding than traditional non-time retail deposits. Over time, M&T will have to execute its retail strategy in Hudson City's highly competitive markets to attract non-time deposits, which are expected to fund the increase in commercial loans in the NYC region.