What is the Series G Preferred Stock and why is it being issued?

The Series G Preferred Stock is a new class of noncumulative perpetual preferred stock issued by BNY Mellon. While the filing doesn't explicitly state the reason for issuance, preferred stock is often issued to strengthen a company's capital base, meet regulatory requirements, or fund operations and growth without diluting common equity ownership as significantly as common stock issuance might.

How does the Series G Preferred Stock affect common stockholders?

The primary impact on common stockholders is a potential restriction on dividend payments or share repurchases. If BNY Mellon fails to declare and pay (or set aside) dividends on the Series G Preferred Stock for the preceding dividend period, it cannot declare or pay dividends on, or repurchase, its common stock or any securities ranking junior to the Series G Preferred Stock. This prioritizes preferred stockholders' dividends over common stockholders' distributions.

What are depositary shares?

Depositary shares are securities that represent an ownership interest in a corporation's preferred stock. In this case, each depositary share represents a 1/100th interest in one share of BNY Mellon's Series G Preferred Stock. They are often created to make preferred stock more accessible and tradable in smaller denominations for investors.

What is the liquidation preference of the Series G Preferred Stock?

The Series G Preferred Stock has a liquidation preference of $100,000 per share. This means that upon liquidation of BNY Mellon, holders of this preferred stock are entitled to receive $100,000 per share before any distribution of assets is made to common stockholders.

BK 8-K: Shareholder Matters & Corporate Changes

Summary

This 8-K filing from The Bank of New York Mellon Corporation (BK) announces the issuance of its Series G Noncumulative Perpetual Preferred Stock and the related public offering of depositary shares. This new class of preferred stock has a liquidation preference of $100,000 per share and impacts the company's ability to pay dividends on or repurchase its common stock or other junior securities if preferred dividends are not met. The filing includes details of the underwriting agreement for the offering of depositary shares, each representing a 1/100th interest in a share of the Series G Preferred Stock. From an investor's perspective, the introduction of this preferred stock means that dividend payments to common stockholders could be restricted under certain conditions, specifically if the company fails to pay dividends on the Series G Preferred Stock. This filing is crucial for understanding potential impacts on common equity distributions and the overall capital structure of BNY Mellon.

Key Highlights

1BNY Mellon has issued Series G Noncumulative Perpetual Preferred Stock.
2The Series G Preferred Stock has a liquidation preference of $100,000 per share.
3Issuance of Series G Preferred Stock imposes restrictions on dividends or repurchases of common stock if preferred dividends are not paid.
4The company entered into an underwriting agreement for a public offering of 1,000,000 depositary shares.
5Each depositary share represents a 1/100th interest in a share of the Series G Preferred Stock.
6The Certificate of Designations establishing the Series G Preferred Stock was filed with the Secretary of State of Delaware and became effective on May 15, 2020.
7The filing incorporates by reference the underwriting agreement, deposit agreement, and legal opinions related to the issuance.

Bank of New York Mellon Corp 8-K Report, Rights Modification (May 19, 2020)

Summary

Key Highlights

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