Mastercard Inc (NYSE:MA) First Debt Offering in 3 Years Gets Rated A2 By Moody’s


Dallas, Texas 04/02/2014 (FINANCIALSTRENDS) – Mastercard Inc (NYSE:MA) in an SEC filing dated 31st March has disclosed that it has entered into a agreement with a consortium of banking and brokerage majors which include the likes of Citigroup Global Markets Inc., Merrill Lync, Fenner & Smith Incorporated and Goldman, Sachs & Co as per which, the consortium will act as its underwriters and provide underwriting services to the payment gateway majors planned sale of senior notes to raise $600 million funds through the debt instruments.

The underwriters have agreed to purchase two set of notes, which will have two different maturity dates. The first trench of senior notes is worth $500 million in principal, and will attract an interest component of 2 percent and will be due for maturity in 2019. The second offering is for $1 billion in principal, and will be coming up for maturity in 2024. It will be paying an interest of 3.37 percent. Mastercard Inc (NYSE:MA) issued these notes in a liaison with Deutsche Bank Trust Company Americas.

It is for the first time in this decade, that the payment gateway major has resorted to the debt servicing route, after all along maintaining a debt free funding profile all these years. On the back of its strong financial performance over the past few quarters, and positive outlook for its next few quarters, Moody’s Investor Service has recommended the two notes issues as having a stable outlook and has pegged the ratings at a A2. The proceeds of $1.5 billion that the firm has raised through this exercise is going to be used by Mastercard Inc (NYSE:MA) to extend its operational leverage and there by retain and increase its share holder value and returns.

Moody’s Investor Service analysts have opined that they are confident of firm sustaining solid growth in its top-line over the next few quarters.