Visa 2010 Annual Report Download - page 54

Table of Contents
on our credit rating; or (3) U.S. Swing Loan, Euro Swing Loan, or Foreign Currency Swing Loan, which will bear interest at the rate equal to the applicable
Swing Loan rate for that currency plus the same applicable margin plus additionally for Euro and Sterling loans, an applicable reserve requirement and cost
adjustment. We also agreed to pay a facility fee on the aggregate commitment amount, whether used or unused, at a rate ranging from 0.04% to 0.10% and a
utilization fee on loans at a rate ranging from 0.05% to 0.10% based on our credit rating. Currently, the applicable margin is 0.15%, the facility fee is 0.05%
and the utilization fee is 0.05%. This facility contains certain covenants, including financial covenant requirements relating to a maximum level of debt to
EBITDA and events of default customary for financings of this type. This facility expires on February 15, 2013. There were no borrowings under this facility
and we were in compliance with all covenants during and at the end of fiscal 2010.
U.S. commercial paper programs. We maintain a $500 million U.S. commercial paper program, which provides for the issuance of unsecured debt with
maturities up to 270 days from the date of issuance at interest rates generally extended to companies with comparable credit ratings. The commercial paper
program is a source of short-term borrowed funds that may be used from time to time to cover short-term cash needs. We had no obligations outstanding
under this program during and at the end of fiscal 2010. There are no financial covenants related to this program.
Universal shelf registration statement. On May 6, 2009, we filed a registration statement with the U.S. Securities and Exchange Commission using a
shelf registration process. As permitted by the registration statement, we may, from time to time, sell shares of debt or equity securities in one or more
transactions. The registration statement expires on May 5, 2012.
Escrow account. We maintain an escrow account for use in the payment of covered litigation matters. When the Company funds the escrow account,
the shares of class B common stock held by our stockholders are subject to dilution through an adjustment to the conversion rate of the shares of class B
common stock to shares of class A common stock. See Note 4—Retrospective Responsibility Plan to our consolidated financial statements. The balance in this
account at September 30, 2010 was $1.9 billion and is reflected as restricted cash on our consolidated balance sheet. In October 2010, after the end of our
2010 fiscal year, we deposited an additional $800 million into the escrow account. As these funds are restricted for use solely for the purpose of making
payments related to covered litigation matters, we have not included them as part of our liquid assets. However, they should be viewed as a source of cash for
purposes of making payments related to settlement of or judgment in covered litigation matters, as described below under Uses of Liquidity.
Credit Ratings
At September 30, 2010, Standard and Poor's and Moody's rated our unsecured debt as follows:
Standard and Poor's Moody's
Debt type Rating Outlook Rating Outlook
Long-term unsecured debt
Local A+ Stable A1 Stable
Foreign A+ Stable A1 Stable
Short-term unsecured debt A-1 Stable P-1 Stable
Various factors affect our credit ratings, including changes in our operating performance, the economic environment, conditions in the electronic
payment industry, our financial position and changes in our business strategy. We do not currently foresee any reasonable circumstances under which our
credit ratings would be significantly downgraded. If a downgrade were to occur, it could adversely impact, among other things, our future borrowing costs and
access to capital markets.
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