8-KEarnings & ResultsOther EventsExhibits & Filings

Bank of New York Mellon Corp 8-K Report, Financial Results (Jul 21, 2011)

Filed July 21, 2011For Securities:BKBK-PKBNYBNY-PK

Summary

This 8-K filing from The Bank of New York Mellon Corporation (BK), filed on July 21, 2011, primarily serves to incorporate by reference their second-quarter 2011 earnings press release and announce a significant strategic divestiture. Investors should note the company's intention to sell a majority equity stake in ConvergEx Group through an all-cash transaction, which is expected to strengthen its capital structure and focus its business operations. Additionally, the filing addresses concerns regarding the company's credit ratings. It highlights Moody's Investors Service's decision to place BK's supported ratings under review for a possible downgrade, directly linked to Moody's review of the U.S. government's Aaa rating. While Moody's stated this action does not reflect a change in BK's standalone financial strength, it underscores the potential impact of broader economic and regulatory factors on the company's funding costs and access to capital.

Key Highlights

  • 1BK filed an 8-K on July 21, 2011, to incorporate its Q2 2011 earnings press release (Exhibit 99.1) and announce the sale of a majority stake in ConvergEx Group (Exhibit 99.2).
  • 2The company announced a definitive agreement to sell a majority of its equity stake in ConvergEx Group to funds advised by CVC Capital Partners in an all-cash transaction.
  • 3The sale of ConvergEx Group is expected to close in early fall 2011.
  • 4Moody's Investors Service placed BK's supported ratings (deposit, senior debt, senior subordinated debt) under review for possible downgrade on July 18, 2011.
  • 5This rating action by Moody's is directly related to Moody's review of the U.S. government's Aaa rating.
  • 6Moody's explicitly stated that the review of BK's ratings does not reflect a change in the company's standalone financial strength.
  • 7The filing notes a prior change by Moody's on June 2, 2011, where the rating outlook for BK's debt was changed to negative from stable due to reassessed systemic support assumptions and the impact of the Dodd-Frank Act.

Frequently Asked Questions

The main purpose of this 8-K filing is to officially incorporate by reference The Bank of New York Mellon Corporation's second-quarter 2011 earnings press release and to announce a significant strategic decision: the sale of a majority equity stake in its ConvergEx Group subsidiary.

The sale of ConvergEx Group, an all-cash transaction, is expected to be beneficial for BK. It likely aims to streamline the company's operations, divest a non-core asset, and potentially strengthen its capital position.

Moody's placed BK's supported ratings under review for possible downgrade primarily because Moody's itself was reviewing the U.S. government's Aaa rating. This action by Moody's for BK is directly linked to the sovereign rating review and, importantly, does not indicate a deterioration in BK's standalone financial strength according to Moody's.

Yes, prior to this filing, on June 2, 2011, Moody's had already changed the rating outlook for BK's debt from stable to negative. This was attributed to Moody's reassessment of its systemic support assumptions and the potential impact of the Dodd-Frank Act.