SAN FRANCISCO – Hundreds of credit unions this week were cashing their checks from the Visa initial public offering of two weeks ago, promising to make April one of their best months of the year.
“This should be a good financial month in credit union-land,” Dallas Bergyl, president of Inova FCU, told The Credit Union Journal yesterday.
Inova FCU on Monday received a $200,000 payment from Visa for the redemption of 4,760 Class B Visa shares, leaving the Elkhart, Ind., credit union with more than 14,500 Class A shares valued at more than $900,000.
For bigger credit unions such as North Carolina’s State Employees CU, the windfall was significantly larger. The credit union received a $4.1 million payment Monday, which represented the redemption of 95,558 Class B shares at $42.77 each. The credit union’s remaining 151,621 Class B shares were converted into 108,301 publicly traded Class A shares valued at more than $6.7 million as of yesterday.
Under the terms of the IPO, credit unions may not sell their Class A shares for a period of three years.
The redemption of the Class B shares will be used by Visa to fund a legal reserve fund of up to $10 billion to settle ongoing litigation costs.
Credit unions and banks that were principal Visa members – that is, they had their own Bank Identification Numbers, or BINs – received non-publicly-traded Class B shares as part of Visa’s IPO.
The publicly traded Class A shares closed up almost 6% yesterday at $65.94.
