Summary
Visa Inc. (V) filed an 8-K report on January 31, 2013, announcing the entry into a new $3.0 billion, 364-day unsecured revolving credit facility. This facility, effective January 31, 2013, and expiring on January 30, 2014, replaces a prior credit facility set to expire in February 2013. The new facility provides Visa with significant financial flexibility for general corporate purposes. The credit facility includes customary covenants, such as maintaining a specific debt-to-EBITDA ratio (not greater than 3.75 to 1.00), and other restrictions common in such agreements. Notably, at the time of filing, Visa had no outstanding borrowings under this new facility. The participation of certain Visa shareholders, customers, and their affiliates as lenders highlights established relationships within Visa's ecosystem.
Key Highlights
- 1Visa Inc. secured a new $3.0 billion, 364-day unsecured revolving credit facility.
- 2The new facility replaces a previous $3.0 billion credit line expiring in February 2013.
- 3Borrowings under the facility are available for general corporate purposes, providing financial flexibility.
- 4Interest rates will be based on LIBOR or an alternative base rate plus a margin that varies with Visa's credit rating.
- 5A key financial covenant requires Visa to maintain a Consolidated Indebtedness to Consolidated EBITDA Ratio of no greater than 3.75 to 1.00.
- 6Visa had no outstanding borrowings under the new credit facility at the time of the filing.
- 7Lenders include some Visa shareholders and customers, indicating strong business relationships.