BNY Prices $1.25 Billion Of 7.125% Perpetual Preferred, With Rate Resetting After December 20, 2031
The Series O depositary shares carry a $1,000 liquidation preference, and the term sheet shows $1,237,500,000 in net proceeds before expenses.
The Bank of New York Mellon priced $1.25 billion of depositary shares tied to Series O noncumulative perpetual preferred stock on Monday, according to a term sheet filed with the SEC. The shares pay 7.125% a year until December 20, 2031, after which the rate resets.
What the term sheet says
BNY sold 1,250,000 depositary shares at $1,000 each. Each one represents a 1/100th interest in a share of Series O Noncumulative Perpetual Preferred Stock, so the liquidation preference is $1,000 per depositary share, or $100,000 per preferred share.
The underwriting discount is $10 per depositary share. Net proceeds to BNY before expenses come to $1,237,500,000.
The dividend is noncumulative, meaning undeclared dividends do not pile up. It runs at 7.125% a year from the original issue date until December 20, 2031. From that date, it resets to the five-year treasury rate plus 2.192%, and the term sheet says the reset repeats on each fifth anniversary.
Dividends are scheduled for March 20, June 20, September 20 and December 20, starting March 20, 2027. The term sheet gives expected ratings of Baa1 from Moody's, BBB from S&P, BBB+ from Fitch and A from DBRS, all with stable outlooks.
What it means for holders
BNY may redeem the preferred stock, in whole or in part, on December 20, 2031 or any dividend date after that. The price is $100,000 per share ($1,000 per depositary share) plus any declared and unpaid dividends. It may also redeem the whole issue, but not part of it, within 90 days after a "Regulatory Capital Treatment Event."
Holders have no right to force a redemption or repurchase. The depositary shares are not bank deposits and are not insured by the FDIC.
The term sheet does not state a use of proceeds, and it gives no count of shares outstanding after the offering. BNY shares closed at $142.44 on Monday, down 0.60%.
Who is running the deal
Barclays Capital, BofA Securities, Deutsche Bank Securities, Goldman Sachs, Morgan Stanley and BNY Mellon Capital Markets are the joint book-running managers. Settlement is set for October 28, 2026, which the term sheet labels T+7, longer than the usual one-business-day cycle. Anyone trading the shares before then must specify an alternative settlement cycle.
The first dividend date is March 20, 2027, and the earliest redemption date is December 20, 2031.
Sources
- Form FWP — Bank of New York Mellon Corp (BNY) — SEC EDGAR
