Visa Inc.

Our stable outlook on Visa reflects S&P Global Ratings' expectation that the company will maintain solid earnings, high and stable profit margins, and low leverage--without any major disruption at least in the next two years from technological advancement, litigation, or regulation. More specifically, we expect Visa to operate with debt to EBITDA around 0.6x or lower, as we measure it, with EBITDA margins near 70%. We could lower our ratings on Visa if its leverage rose significantly, particularly if debt to EBITDA approached or exceeded 1.5x without a plan to materially reduce it. We could also lower the rating if its profitability fell significantly, if existing or new regulatory or legal challenges prove more problematic than we currently anticipate, or

...Visa Inc. is the operator of the largest retail payment network outside of China. Its ubiquity with consumers, merchants, and banks help well protect its market position. Visa has consistently reported robust profitability and rising earnings.Its earnings benefit from global economic growth and consumers' increasing use of electronic payments. Visa has low leverage and generates strong cash flows. Its debt to EBITDA was about 0.4x and funds from operations (FFO) to debt was well above 60%. Visa's high market share in electronic payments exposes it regulatory and legal risks.Lawsuits and regulatory changes have repeatedly challenged the card networks, their rules, and the fees associated with payment processing over several years. Visa has material operational risk as well as large unsecured exposures to financial institutions stemming from its promise to stand behind all transactions processed on its network....

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