Charge!

18 March 2008 By Cyrus Sanati

The credit card giant s megaIPO priced above its target range amid heavy demand. But those hoping the largestever US debut will unblock the moribund new issue market may be disappointed. Wall Street woes and investor risk aversion will weigh on the market for some time.

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Shares of Visa, the world's largest credit card processor, popped as much as 35% to $60 on its market debut. Shares later traded between $55 and $60 for most of the morning. At nearly $18bn, the Visa IPO is the largest new offering ever to hit the US market.

Excluding Visa, the total value of new issuances in the US this year totaled just $4.5bn, down 56% from the same time last year, according to dealogic. Excluding the socalled blank check IPOs, only 10 companies went to market this year, raising $1bn. That is the worst showing for the IPO market since the first quarter of 2003. There have been 34 SEC filed IPOs postponed in 2008 worth $6.84bn.

The 15 underwriters, led by Goldman Sachs and JPMorgan, have the right to sell an additional. 40.6m shares. At the conclusion of the offering, the majority of the company will be publically owned.

Visa is currently owned by a collection of financial institutions including JPMorgan Chase, Bank of America, Citigroup, and others. They will collectively receive $10.6bn of the IPO proceeds. Another $3bn is earmarked for a special litigation liability fund. The rest will go to fund Visa's operations.

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