DOW JONES NEWSWIRES
Bank of New York Mellon Corp. (BK) announced plans to sell $1
billion in stock to repay the U.S. Treasury Department for its
investment, making it the latest financial concern Monday to
announce such a move.
Before the start of trading, five larger companies disclosed
efforts to sell more than $7 billion combined in shares following
Thursday's disclosures of the government's stress-test results.
Bank of New York was told it didn't have to raise new capital,
but several similar banks are taking the opportunity to do so now
anyway. Many banks have said they will pay back Troubled Asset
Relief Program funding as quickly as possible in order to avoid
strict regulations on their activity - particularly related to
executive pay - imposed by the government.
The companies announcing stock sales Monday morning were U.S.
Bancorp (USB), Capital One Financial Corp. (COF), KeyCorp (KEY),
Principal Financial Group Inc. (PFG) and BB&T Corp. (BBT). U.S.
Bancorp, Capital One and BB&T also didn't have to raise capital
on the stress-test results, while KeyCorp was told to raise $1.8
billion.
Bank of New York's planned stock sale comes as the company sold
$1.5 billion in notes with the intention of using proceeds to repay
the $3 billion in TARP funding the company received.
The amount of stock actually sold could be more than Monday's
announcement from Bank of New York as many other companies have
been boosting the size of their offerings recently due to strong
demand for shares.
The company has a market valuation of slightly more than $30
billion. Its stock fell 1.5% after-hours to $29.10 after falling
8.1% to $29.55 in regular trading. The sector has surged the past
two months.
-By Kevin Kingsbury, Dow Jones Newswires; 201-938-2136;
kevin.kingsbury@dowjones.com
