DBRS Assigns New Ratings to The Bank of New York Mellon SA/NV Following Merger between Bank Subs

DBRS, Inc. (DBRS) has today assigned new ratings to The Bank of New York Mellon SA/NV (BNY Mellon SA/NV) and its Luxembourg and London branches, including Deposits & Senior Debt ratings of AA and Short-Term Instruments ratings of R-1 (high), all with Stable trends. BNY Mellon SA/NV is the primary banking subsidiary of The Bank of New York Mellon (Bank) in continental Europe and is considered a material entity. Additionally, DBRS upgraded the Deposits & Senior Debt and Short-Term Instruments ratings of Bank of New York Mellon (Luxembourg) S.A. - Italian Branch to AA and R-1 (high), respectively, as it was merged into BNY Mellon SA/NV and will now be notated as The Bank of New York Mellon SA/NV – Milan Branch, as it now resides in a material entity.

At the same time, DBRS has withdrawn the ratings of Bank of New York Mellon (Luxembourg) S.A., including its Deposits & Senior Debt rating of AA (low) and Short-Term Instruments rating of R-1 (middle). This follows the merger of Bank of New York Mellon (Luxembourg) S.A. with, and into, BNY Mellon SA/NV, as part of an internal reorganization by The Bank of New York Mellon Corporation (BNY Mellon, the Company, or the Parent) to rationalize its legal entity structure and to streamline its operations. The merger was effective on April 1, 2017, on which date all the assets and liabilities of Bank of New York Mellon (Luxembourg) S.A. was acquired by BNY Mellon SA/NV and Bank of New York Mellon (Luxembourg) S.A. was dissolved without going into liquidation, with its operations being merged into The Bank of New York Mellon SA/NV – Luxembourg Branch.

Primarily focused on global custody and collateral management in continental Europe supporting the asset servicing business, BNY Mellon SA/NV is also highly integrated with the Bank. Given its critical function, DBRS has assigned a SA1 support assessment to BNY Mellon SA/NV, indicating strong and predictable support from the Parent. As such, BNY Mellon SA/NV will generally move in tandem with the Bank’s long-term debt ratings.

DBRS’s ratings of BNY Mellon, the ultimate parent, and the Company’s U.S. and U.K. bank subsidiaries are unaffected by this action. DBRS rates BNY Mellon’s Issuer & Senior Debt at AA (low) with a Stable trend and Short-Term Instruments at R-1 (middle) with a Stable trend.

RATING DRIVERS
The ratings of Bank of New York Mellon SA/NV will generally move in tandem with the Bank’s long-term debt ratings. Given the already relatively high rating level, there is limited upside in the rating. Conversely, sustained negative operating leverage or additional operational issues that negatively impact new business could have negative rating implications.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodologies are the Global Methodology for Rating Banks and Banking Organisations (July 2016), DBRS Criteria – Support Assessments for Banks and Banking Organisations (March 2017), and DBRS Criteria - Rating Bank Capital Securities – Subordinated, Hybrid, Preferred & Contingent Capital Securities (February 2017), which can be found on our website under Methodologies.

The primary sources of information used for this rating include company documents and SNL Financial. DBRS considers the information available to it for the purposes of providing this rating was of satisfactory quality.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.

Lead Analyst: Michael McTamney, Vice President
Rating Committee Chair: William Schwartz, Senior Vice President
Initial Rating Date: 2 July 2007
Most Recent Rating Update: 2 December 2016

The rated entity or its related entities did participate in the rating process. DBRS had access to the accounts and other relevant internal documents of the rated entity or its related entities.