BNY Mellon announced the pricing of a $500 million offering of 500,000 depositary shares, each representing a 1/100th interest in a share of its Series M non‑cumulative perpetual preferred stock. The shares were priced at $1,000 each, matching the $100,000 liquidation preference per share and yielding the full aggregate offering price.
The Series M preferred stock carries a fixed dividend of 5.625 % per annum from the issue date until March 20 2031. After that date, the dividend will reset to the five‑year Treasury rate plus 2.034 %, providing a floating rate that adjusts with market conditions. The preferred shares are redeemable at the company’s option on or after March 20 2031, at a cash redemption price equal to the original $100,000 per share plus any declared and unpaid dividends, with no accumulation of undeclared dividends.
The net proceeds from the offering are earmarked for general corporate purposes, including potential capital deployment or balance‑sheet strengthening. BNY Mellon also indicated that the proceeds could be used to redeem existing Series H and Series F preferred stock, a refinancing strategy that could lower borrowing costs if market conditions are favorable. The issuance of perpetual preferred stock is a common tool for large financial institutions to raise capital while preserving common equity, and the terms suggest a moderate cost of capital given the fixed dividend and redemption features.
The Series M offering expands BNY Mellon’s capital structure and provides additional liquidity for strategic initiatives or shareholder returns. By adding regulatory‑capital‑eligible preferred stock, the bank can strengthen its capital ratios without diluting common equity, supporting its ability to meet regulatory requirements and fund future growth. The moderate dividend rate and floating‑rate reset align with the bank’s overall cost‑of‑capital strategy, offering investors a predictable return while giving the bank flexibility to adjust to changing market rates.
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