Visa hoping to raise US$10bn in New York IPO


Sun, Nov 11, 2007 - Page 11

Visa, the biggest US credit card network, said in a regulatory filing it hopes to raise US$10 billion in an initial public offering.

Visa said on Friday it would deposit a portion of the company's proceeds from the IPO into an escrow account to pay settlements or judgments related to litigation settlements.

On Wednesday, Visa disclosed it will pay American Express Co up to US$2.07 billion to settle a lawsuit alleging the company illegally stifled competition. Under the plan, Visa said its member banks will absorb the costs of the settlement.

Despite a turbulent week on Wall Street, which ended with a major drop on Friday, Visa's IPO is hotly anticipated by investors. Visa is following in the footsteps of rival MasterCard, which has more than quadrupled since the company went public in May at US$39 a share.

As Wall Street struggles, Visa and MasterCard have secured the enviable role of processing the world's credit card payments but taking on none of the debt. The risk is instead held by the 25,000 banks in more than 200 countries that issue the cards.

On Oct. 31, MasterCard Inc reported that third-quarter profit jumped 63 percent, far exceeding Wall Street's expectations and driving shares to an all-time high.

Visa posted net income of US$771 million on operating revenue of US$3.73 billion for the nine months ended June 30, the Securities and Exchange Commission filing said.

Visa did not disclose the number or expected price range of the shares it plans to offer. The company said the total offering price was estimated solely to calculate its registration fee and may change.

Visa also did not indicate whether any stockholders would sell shares in the IPO. The company listed JPMorgan Chase as its largest stockholder, with 23.3 percent of its Class B shares. The filing said that Bank of America Corp owns 11.5 percent of Visa's Class B stock and National City Corp owns 8 percent of Class B shares.

JP Morgan Securities, Goldman Sachs, Banc of America Securities, Citigroup Global Markets, HSBC Securities, Merrill Lynch, UBS Securities and Wachovia Capital Markets are serving as the IPO's lead underwriters.

Visa made the disclosure in an S-1 filing with the SEC. Previously, Visa released the restructuring steps it would take to prepare for its IPO in S-4 filings.