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Bank of New York Mellon Corp 8-K Report, Rights Modification (Nov 18, 2021)

Filed November 18, 2021For Securities:BKBK-PKBNYBNY-PK

Summary

Bank of New York Mellon Corporation (BK) has filed an 8-K report detailing the issuance and public offering of Series I Noncumulative Perpetual Preferred Stock. This preferred stock, represented by depositary shares, was established through a Certificate of Designations filed on November 16, 2021, and the company entered into an underwriting agreement on November 8, 2021, for the public offering. The issuance of this Series I Preferred Stock introduces certain restrictions on BK's ability to pay dividends or repurchase common stock if dividends on the preferred stock are not paid for a preceding dividend period. This move suggests a strategic capital management decision by the company, likely aimed at enhancing its capital structure or meeting regulatory requirements, while also signaling a commitment to preferred shareholders.

Key Highlights

  • 1BK established Series I Noncumulative Perpetual Preferred Stock with a liquidation preference of $100,000 per share.
  • 2A public offering of 1,300,000 depositary shares, each representing a 1/100th interest in a share of Series I Preferred Stock, was arranged.
  • 3The issuance of Series I Preferred Stock imposes restrictions on BK's ability to pay common stock dividends or repurchase junior stock if preferred dividends are missed.
  • 4A Certificate of Designations was filed with the Secretary of State of Delaware on November 16, 2021, detailing the terms of the Series I Preferred Stock.
  • 5The company entered into an Underwriting Agreement on November 8, 2021, with several underwriters for the public offering.
  • 6The Series I Preferred Stock is noncumulative, meaning missed dividend payments are not carried forward.
  • 7The filing includes incorporated exhibits such as the Underwriting Agreement, Certificate of Designations, and Deposit Agreement.

Frequently Asked Questions

The primary purpose of this 8-K filing is to report the establishment and public offering of BK's Series I Noncumulative Perpetual Preferred Stock. It details the terms of this new class of stock and the associated underwriting and deposit agreements.

The Series I Preferred Stock introduces restrictions on BK's ability to declare or pay dividends on its common stock, or to purchase, redeem, or otherwise acquire shares of its common stock (or any shares ranking junior to the Series I Preferred Stock), if dividends on the Series I Preferred Stock are not paid for the last preceding dividend period.

The term 'noncumulative' means that if BK fails to pay a dividend on the Series I Preferred Stock in a given dividend period, that missed dividend payment is permanently forfeited and does not accrue or become payable at a later date. This is a key feature for preferred stock holders and the issuing company.

The filing states that 1,300,000 depositary shares were offered, with each depositary share representing a 1/100th interest in a share of Series I Preferred Stock. Each share of Series I Preferred Stock has a liquidation preference of $100,000. Therefore, the total liquidation preference associated with the offered shares can be calculated based on the total number of underlying preferred shares represented by the depositary shares.