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Bank of New York Mellon Plans $1.5 Billion Three-Part Bonds

Oct. 18 (Bloomberg) -- Bank of New York Mellon Corp., the world’s largest custody bank, is offering $1.5 billion of bonds after reporting third-quarter earnings yesterday that climbed a more-than-estimated 11 percent.

The bank may sell $600 million of three-year fixed-rate debt to yield 33 basis points more than similar-maturity Treasuries, $400 million of three-year floating-rate notes at a relative yield of 23 basis points more than the quarterly London interbank offered rate, and $500 million of securities due January 2018 at a spread of 55 basis points, according to a person familiar with the transaction.

Bank of New York last sold dollar debt in May, issuing $500 million of 1.969 percent, five-year debentures to yield 110 basis points more than similar-maturity Treasuries, according to data compiled by Bloomberg.

The new bonds may be rated Aa3 by Moody’s Investors Service and A+ by Standard & Poor’s, said the person, who asked not to be identified because terms aren’t set. Bank of New York, Morgan Stanley, Royal Bank of Scotland Group Plc, and UBS AG are managing the offering, which may be completed as soon as today.

Net income at the bank increased to $720 million, or 61 cents a share, from $651 million, or 53 cents, a year earlier, the New York-based bank said in a statement yesterday. Profit beat the 54-cent-a-share average estimate of 16 analysts surveyed by Bloomberg.

To contact the reporter on this story: Sarika Gangar in New York at sgangar@bloomberg.net;

To contact the editor responsible for this story Alan Goldstein at agoldstein5@bloomberg.net;

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