BNY prices $1.25B preferred-stock sale at 7.125% as capital costs climb
What's the deal? The Bank of New York Mellon Corporation (BNY) has priced a $1.25 billion public offering of depositary shares tied to its Series O noncumulative perpetual preferred stock. The deal, announced October 19, 2026, carries a 7.125% annual dividend through December 20, 2031, after which the rate resets to the five-year treasury rate plus 2.192%.
The details: BNY is selling 1,250,000 depositary shares at $1,000 each, each representing a 1/100th interest in a preferred share. The bank can redeem the stock from December 20, 2031 onward, and will use proceeds for general corporate purposes. The offering is expected to close on October 28, 2026.
Who ran it: Barclays, BofA Securities, Deutsche Bank Securities, Goldman SachsDealroom has a profile for this one. Try Dealroom →, Morgan Stanley, and BNY Mellon Capital Markets served as joint book-running managers.
Why now? The deal is far larger and costlier than BNY's July issuance, which raised $500 million at 6.15%. The jump to 7.125% reflects the higher cost of capital facing banks as market yields rise.
What's the endgame? Preferred shares are a hybrid security popular with US banks because they count toward regulatory capital without diluting common shareholders. The trade-off: dividends are discretionary and noncumulative, payable only when BNY's board declares them and funds are legally available.
The signal: The offering ranks in the 97th percentile by size among post-IPO equity rounds in US fintech, all-time. It priced as much as 0.5 percentage point below initial talk, suggesting strong demand — but the higher coupon is the more important read: for lenders, capital is getting more expensive.
Read more: pr.roundupweb.com
Image credit: daveynin
