Visa (V) to release $1.4B from preferred shares

On August 8, 2025, Visa (NYSE: V) announced that it will release approximately $1.4 billion from its Series B and Series C Convertible Participating Preferred Stock (“Series B Preferred Stock” and “Series C Preferred Stock,” respectively, and collectively, “Preferred Stock”) in connection with the fourth mandatory release assessment on June 21, 2025, the ninth anniversary of the Visa Europe acquisition transaction and the issuance of the Preferred Stock. As required by the Litigation Management Deed (“LMD”) entered into at the time of the transaction, at each release assessment, Visa, in consultation with the Litigation Management Committee comprising representatives of former Visa Europe members (“LMC”), performs a conservative assessment of the ongoing risk of liability to Visa and its subsidiaries arising from certain existing and potential litigation relating to the setting of multilateral interchange fee rates in the Visa Europe territory. Visa and the LMC have followed the procedures identified in the LMD, and the fourth release amount is now final.
The release will result in a downward adjustment of the Class A Common Equivalent Number (as defined in the certificates of designations (“CODs”) for the Preferred Stock), and a partial conversion of the Preferred Stock into Series A Convertible Participating Preferred Stock (“Series A Preferred Stock”) in accordance with the applicable COD, each of which was filed as an exhibit to Visa’s Annual Report on Form 10-K for the fiscal year ended September 30, 2024. The adjustments were calculated in accordance with the CODs using the volume-weighted average price for Visa’s Class A Common Stock over the 10-day trading period from June 6, 2025 through June 20, 2025.
Effective August 18, 2025 (the “Effective Date”), the Liability Coverage Reduction Amount (as defined in the CODs), Conversion Adjustment (as defined in the CODs) and new Class A Common Equivalent Number for each series of Preferred Stock will be updated as follows:
a. Series B Preferred Stock: A Liability Coverage Reduction Amount of approximately $287 million, which will result in a Conversion Adjustment Reduction of 0.327 and reduce the Class A Common Equivalent Number for the Series B Preferred Stock from 0.996 to 0.669; and
b. Series C Preferred Stock: A Liability Coverage Reduction Amount of approximately $1.1 billion, which will result in a Conversion Adjustment Reduction of 1.019 and reduce the Class A Common Equivalent Number for the Series C Preferred Stock from 1.783 to 0.764.
On the Effective Date, the Company will issue approximately 40,080 shares of Series A Preferred Stock, subject to adjustment to account for fractional shares, to holders of record of Preferred Stock as of August 18, 2025. Each holder of Preferred Stock will receive a number of shares of Series A Preferred Stock equal to the applicable Conversion Adjustment Reduction per share of Preferred Stock, divided by 100. The Company will pay cash in lieu of issuing fractional shares of Series A Preferred Stock. Each share of Series A Preferred Stock will be automatically converted into 100 shares of Class A Common Stock in connection with a sale to a person eligible to hold Class A Common Stock in accordance with Visa’s certificate of incorporation.

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