MasterCard IPO Planned

Under the new corporate governance and ownership structure, MasterCard's current shareholders, approximately 1,400 financial institutions worldwide, are expected to retain a 41% equity interest in MasterCard Incorporated through their ownership of non-voting Class B common stock. In addition, existing shareholders will receive Class M common stock that will have no economic rights but will provide them with certain rights, including the right to elect several directors from financial institutions around the world.

MasterCard also intends to issue shares of voting Class A common stock to public investors through an initial public offering. Upon successful completion of the offering, these public investors will hold shares representing an expected 49% of the company's equity and 83% of its voting rights. Additional shares of Class A common stock, representing an expected 10% of the company's equity and the remainder of its voting rights, will be issued to a new MasterCard charitable foundation.

MasterCard intends to use a portion of the net proceeds from the proposed initial public offering to redeem shares of Class B common stock from its existing financial institution shareholders. Implementation of the new corporate governance and ownership structure is subject to various contingencies, including shareholder approval and the requisite regulatory filings.

MasterCard this morning filed with the SEC a shareholder letter and a shareholder presentation providing more details on the announcement. In the presentation, MasterCard indicated that proceeds from the IPO will be primarily used to redeem a portion of existing shareholders' Class B shares with MasterCard retaining $650 million of the IPO proceeds to fund a capital increase.