Different Types of Capital Structures

¶ … Bank of New York Mellon has three core statements that they adhere to and abide by. Those three statements are their company perspective, their mission/values statement and their vision statement. Their company perspective if as follows: "We have built our company upon a well-defined strategy; provide a breadth of financial solutions to our customers -- what they need, when they need them, how they want them delivered. It's the core of our success in the market place, the root of shareholder value, our foundation for growth" (Making a Fortune, 2015).

The company perspective explains that they have created their company from the ground up using the depth and breadth of their financial knowledge. They are committed to delivering what their clients need and in a timely manner. They assert that this is the "core" of their success because if they were not able to provide such timely, accurate and fruitful advice and service, customers would surely go elsewhere. This in turn contributes to shareholder value and this is necessary to keep investors on board with the company's mission and goals.

The mission/values statement for the Bank of New York Mellon is as follows: "Our vision and our values guide us in creating an environment where our clients' expectations and our shared, enduring values drive the decisions and behavior of our organization" (Making a Fortune, 2015).

The mission/values statement explains that the bank is committed to fusing the shared values of the clients and the company with the expectations of those same clients in a way that delivers strong results, delivers over time and helps secure the future of both the company and the investors that work with the bank.

Finally, the vision statement for the Bank of New York Mellon is as follows: "We strive to be the acknowledged global leader and preferred partner in helping our clients succeed in the world's rapidly evolving financial markets" (Making a Fortune, 2015). Here, the bank is asserting that they not only strive to be a leader in the United States investing landscape, but also in the broader world as well.

This statement explicitly recognizes that the global financial markets are ever-changing and evolving and thus the bank must be able to change with the markets. Because the bank is striving to succeed and keep up with the times, the clients are able to do so as well (Making A Fortune, 2015). Financial Questions At a high level, Bank of New York Mellon offers investment services, investment management, market groups and wealth management.

When looking at investment services in particular, they offer alternative prime custody services, hedge fund services, fund of hedge fund services, liquid alternatives, private equity fund services and real estate fund services. They also offer capital market services, broker/deal services and asset servicing. When it comes to employees, the dialog they have and the questions they tend to have, this would include the need to have an open dialog, asking the right questions in general and the alignment of experiences and skills with roles.

Management and employees alike should be informed and educated. There is also a strong leveraging of diversity and technology in the firm. As far as corporate trust people at Mellon, trust associates make about $47,566 a year. Corporate Trust Administrators make about $42,333. Relationship specialists make $54,783, all per Glassdoor (Glassdoor, 2015). A collateralized debt obligation (CDO) is a structure financial product that pools together cash flow-generating assets and repackages the asset pool into discrete tranches that can be sold to investors. The tranches that exist vary widely based on the risk profile.

The risk can range from low to rather high. Then again, the higher the risk the higher the potential return on investment. Senior tranches of a CDO typically have a higher credit rating and lower coupon rate as compared to junior-level tranches. A collateralized mortgage obligation (CMO) is much the same thing but deals with pools or mortgages. With CMO's, the principal repayments are organized according to their maturities and are, like CDO's, classified based on risk (Investopedia, 2015).

When it comes to asset-backed securities and mortgage-backed securities, these are both under the structured finance wing of Bank of NY Mellon's offerings. Like the prior-mentioned CMO's and CDO's, asset-backed securities are collateralized by underlying assets. However, rather than being backed by real estate or mortgages, the asset are things like loans, leases or receivables. A mortgage-based security is backed by a mortgage or a pool of mortgages and is thus the asset that collateralizes that security.

These two offerings are part of a wider pool of investments that also includes credit opportunity funds, covered bonds and other things. A cash flow waterfall model is when each cash flow items occurs in the correct seniority as compared to other items. Cash flow waterfall categories include revenues, expenses, taxes, debt service, distributions and net movement.