Visa intends to issue $15 billion-$16 billion senior notes for Visa Europe purchase

By Susanna Moon

Chicago, Nov. 2 – Visa Inc. plans to issue $15 billion to $16 billion of senior notes between late November and January to fund the cash portion of its planned acquisition of Visa Europe Ltd. for €16.5 billion, according to an 8-K filing with the Securities and Exchange Commission.

The company said it plans to issue the notes in its fiscal first quarter of 2016, with maturities ranging from two and 30 years depending on market conditions.

The upfront cash consideration consists of €11.5 billion and preferred stock convertible into Visa class A common stock valued at €5 billion.

Proceeds also will be used to step up the repurchase of class A common stock outstanding in 2016 and 2017, to offset the effect of the issue of preferred stock, the company said.

The deal is expected to close in the company’s fiscal third quarter of 2016.

Visa’s initial leverage is expected to be between 1.4 times and 1.5 times gross debt to EBITDA and long-term leverage at between 1.1 times and 1.5 times gross debt to EBITDA, which will allow the company to maintain flexibility to pursue future growth opportunities, the company said.

San Francisco’s Visa operates a retail electronic payments network.

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