Bank of New York Mellon Trust Co. v. Merrill Lynch Capital Services Inc.

Between September 2005 and September 2006, defendants Taberna Preferred Funding III, Ltd., Taberna Preferred Funding IV, Ltd., Taberna Preferred Funding VI, Ltd., and Taberna Preferred Funding VII, Ltd., issued notes pursuant to indentures between themselves and JPMorgan Chase Bank, N.A. Plaintiff Bank of New York Mellon Trust Co., N.A. (BONY) succeeded JPMorgan as trustee under the indentures. Because the rate of interest on the notes was a floating rate, the Taberna entities chose to hedge against the risk that the interest rates would *627rise too high by entering into hedge agreements with…