8-KOther EventsExhibits & Filings

Bank of New York Mellon Corp 8-K Report, Corporate Update (Nov 15, 2016)

Filed November 15, 2016For Securities:BKBK-PKBNYBNY-PK

Summary

The Bank of New York Mellon Corporation (BK) filed an 8-K report on November 15, 2016, to announce the termination of its Replacement Capital Covenants. These covenants were originally established in 2006 and 2007 and were amended in subsequent years. The termination was facilitated by designating its 2.450% Senior Notes Due 2026 as the "Covered Debt" under these covenants, a provision that allows for their termination. This action effectively removes any further obligations or restrictions associated with the Replacement Capital Covenants for BNY Mellon. The 5.50% Subordinated Notes due 2018, previously considered Covered Debt, have now ceased to be such. Investors should note that this is a technical filing related to debt covenants and does not appear to indicate any immediate change in the company's financial performance or strategic direction, but rather a simplification of its debt obligations structure.

Key Highlights

  • 1BNY Mellon terminated its Replacement Capital Covenants as of November 15, 2016.
  • 2The termination was achieved by designating the 2.450% Senior Notes Due 2026 as 'Covered Debt' under the covenants.
  • 3Purchasers of the 2026 Notes waived their rights under the covenants, allowing BNY Mellon to terminate them.
  • 4The 5.50% Subordinated Notes due 2018 are no longer considered 'Covered Debt' under the terminated covenants.
  • 5This filing signifies the removal of existing obligations and restrictions related to these specific capital covenants.
  • 6The termination document (Exhibit 99.3) is filed as part of this report.

Frequently Asked Questions

Replacement Capital Covenants are agreements that may require a company to obtain replacement capital if it redeems or repays certain debt obligations before their maturity date. They are designed to ensure that the company maintains a certain level of capital.

The filing indicates that BNY Mellon terminated the covenants as permitted by their terms. By designating the 2026 Senior Notes as 'Covered Debt', the purchasers of these notes waived their rights under the covenants, allowing the company to terminate them. This likely simplifies BNY Mellon's debt management and removes potential future obligations.

Based on this filing alone, the termination appears to be a technical adjustment to the company's debt structure. It removes the obligations and restrictions associated with the specific Replacement Capital Covenants. It does not appear to signal any immediate adverse financial event or a change in the company's overall financial health.

The designation of the 2026 Notes as 'Covered Debt' was a procedural step that allowed BNY Mellon to trigger the termination clause within the Replacement Capital Covenants. The purchasers of these notes agreed to waive their rights, enabling the covenants to be ended without further action or payment related to them.