BNY Mellon Announces Redemption of Floating Rate Senior Notes Due 2024

Rhea-AI Summary

BNY Mellon (BK) to redeem all Floating Rate Senior Notes due April 26, 2024, with an aggregate principal amount of $400,000,000, at a redemption price of 100% of the principal amount plus accrued interest. The redemption date is set for March 26, 2024.

Financial Analyst

The redemption of the Floating Rate Senior Notes by BNY Mellon represents a strategic financial maneuver that aligns with debt management practices often seen in the banking sector. The redemption of these notes, especially if they were carrying a lower interest rate relative to the current market, could indicate an optimization of the company's debt profile. By redeeming these notes before maturity, BNY Mellon may be aiming to reduce interest expenses or refinance the debt at a more favorable rate, given the dynamic interest rate environment.

For investors, the key takeaway is the potential impact on BNY Mellon's interest expense and credit profile. If the redemption is financed by issuing new debt at lower interest rates, it could lead to interest savings. However, if market rates are higher, it might suggest confidence in the bank's liquidity and financial strategy. The $400 million redemption is significant but should be evaluated in the context of the bank's overall debt structure and capital strategy.

Market Research Analyst

From a market perspective, BNY Mellon's decision to redeem its Floating Rate Senior Notes can be seen as a response to the prevailing economic environment and interest rate trends. This action might reflect the bank's anticipation of rate movements and their potential effects on borrowing costs. Market participants often scrutinize such redemptions for signals about a company's financial health and strategic priorities.

Investors might also consider the broader implications for the financial sector, as other institutions may follow suit in an effort to optimize their own balance sheets. The redemption could influence investor sentiment towards BNY Mellon's stock, as it may be perceived as a proactive approach to financial management. It is essential to monitor similar moves within the industry to gauge the sector's direction.

Debt Market Analyst

The redemption of senior notes by BNY Mellon has implications for the debt market, particularly for investors holding these securities. The redemption at 100% of the principal amount, plus accrued interest, is standard practice, but it removes a floating rate instrument from the market, potentially affecting the supply-and-demand dynamics for similar instruments.

For debt investors, the redemption eliminates a future income stream, necessitating a reallocation of capital. The move could signify a tightening of floating rate note supply, which might influence the pricing of remaining instruments. Additionally, the mechanics of payment through The Depository Trust Company are a routine procedure, ensuring an orderly redemption process for note holders.

NEW YORK, March 21, 2024 /PRNewswire/ -- The Bank of New York Mellon Corporation ("BNY Mellon") (NYSE: BK) today announced that it will redeem all of the issued and outstanding Floating Rate Senior Notes due April 26, 2024 (CUSIP 06406RAT4) (the "Notes"). The Notes have an aggregate principal amount of $400,000,000.

The redemption date for the Notes is March 26, 2024 (the "Redemption Date"). The redemption price for the Notes will equal 100% of the principal amount of the Notes plus any accrued and unpaid interest thereon to, but excluding, the Redemption Date (the "Redemption Price").

On and after the Redemption Date, the Notes will no longer be deemed outstanding and interest will no longer accrue on such securities.

Payment of the Redemption Price will be made through the facilities of The Depository Trust Company.

About BNY Mellon

BNY Mellon is a global financial services company that helps make money work for the world — managing it, moving it and keeping it safe. For 240 years we have partnered alongside our clients, putting our expertise and platforms to work to help them achieve their ambitions. Today we help over 90% of Fortune 100 companies and nearly all the top 100 banks globally access the money they need. We support governments in funding local projects and work with over 90% of the top 100 pension plans to safeguard investments for millions of individuals, and so much more. As of December 31, 2023, we oversee $47.8 trillion in assets under custody and/or administration and $2.0 trillion in assets under management.

BNY Mellon is the corporate brand of The Bank of New York Mellon Corporation (NYSE: BK). We are headquartered in New York City, employ over 50,000 people globally and have been named among Fortune's World's Most Admired Companies and Fast Company's Best Workplaces for Innovators. Additional information is available on www.bnymellon.com. Follow us on LinkedIn or visit our Newsroom for the latest company news.

Contacts:
Media                                                             
Garrett Marquis
+1 949 683 1503
garrett.marquis@bnymellon.com

Analysts
Marius Merz
+1 212 298 1480
marius.merz@bnymellon.com

 

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SOURCE BNY Mellon

What is the redemption date for the Floating Rate Senior Notes issued by BNY Mellon (BK)?

The redemption date for the Notes is March 26, 2024.

What is the aggregate principal amount of the Floating Rate Senior Notes due April 26, 2024, issued by BNY Mellon (BK)?

The Notes have an aggregate principal amount of $400,000,000.

What is the redemption price for the Floating Rate Senior Notes due April 26, 2024, issued by BNY Mellon (BK)?

The redemption price for the Notes will equal 100% of the principal amount of the Notes plus any accrued and unpaid interest thereon.

How will the payment of the Redemption Price be made for the Floating Rate Senior Notes issued by BNY Mellon (BK)?

Payment of the Redemption Price will be made through the facilities of The Depository Trust Company.