March 18 (Bloomberg) -- Visa Inc. will proceed with its $17 billion initial public offering today, betting underwriters can pull off the biggest stock sale in U.S. history during the worst year for the Standard & Poor's 500 Index since 2001.

Visa, the world's largest credit-card network, may eclipse AT&T Wireless Group's $10.6 billion offering in 2000, assuming the share price is set at the high end of the projected $37-to-$42 range. San Francisco-based Visa would rank as the world's second-biggest IPO after the Industrial & Commercial Bank of China Ltd.'s $22 billion offering in 2006.

The offering will ``set the tone'' for the equity markets this year, said Chip MacDonald, a partner in the capital markets practice at law firm Jones Day in Atlanta. ``It's going to be a bellwether.''

Chief Executive Officer Joseph Saunders is pressing ahead as consumers pay for more purchases with credit and debit cards instead of cash. The Federal Reserve cut its main lending rate to 2.25 percent today and stock markets gained ground, which may bolster waning demand for IPOs. They've raised $16 billion for 133 companies worldwide in 2008, 47 percent less than a year earlier, according to data compiled by Bloomberg.

Visa moved up the offering last week by one day. Class A shares of the company are scheduled to start trading tomorrow on the New York Stock Exchange under the ticker ``V.'' Michael Buckley, an outside spokesman for Visa, said the company declined to comment today.

No Lending Risk

Visa and rival Mastercard Inc. are insulated from rising defaults and late payments because, unlike American Express Co. and Discover Financial Services, they don't extend credit to cardholders. Banks that issue the cards take the credit risk.

Cards will be used for 55 percent of all U.S. transactions by 2011, rising from 40 percent in 2005, according to the Nilson Report, an industry newsletter based in Carpinteria, California.

The sale may help current Visa investors replenish capital as they brace for more losses tied to debt markets. JPMorgan Chase & Co., the second-biggest U.S. bank by market value and Visa's largest bank holder, stands to make as much as $1.2 billion from the IPO and Bank of America Corp., the nation's largest bank, may pocket more than $595 million, based on the price range set by underwriters.

Coping With Losses

The world's biggest financial firms have been battered by $195 billion of asset writedowns and credit-market losses since the beginning of 2007, including $37.1 billion by Visa's six largest holders, according to data compiled by Bloomberg as of March 14.

Visa's IPO aims to mimic the success of MasterCard, whose stock has gained more than 400 percent since the Purchase, New York-based company went public in 2006.

``It's probably a good time for these companies to raise funds,'' said Tunde Kovacs, an assistant professor of finance at Northeastern University in Boston, referring to the banks. ``There are further defaults expected in the mortgage markets and possibly in some other areas like credit cards.''

Proceeds from the IPO will be used to settle antitrust lawsuits, including a case brought by American Express, Visa said in its prospectus. The rest will be used to buy stock from member companies and to run the business.

Antitrust Case

American Express, the third-largest credit-card network, sued in November 2004 after the U.S. Supreme Court ruled Visa and MasterCard violated antitrust laws by preventing member banks from offering rival cards. Citigroup Inc. and Bank of America, the two biggest U.S. banks, later agreed to offer American Express services.

Visa's profit doubled to $424 million in the quarter ended Dec. 31 and revenue rose 76 percent to $1.49 billion. Revenue at Visa and MasterCard has climbed as consumers pay for more purchases with credit and debit cards instead of cash.

Visa's IPO is being arranged by 15 firms led by JPMorgan and Goldman Sachs Group Inc.

To contact the reporter on this story: Elizabeth Hester in New York at ehester@bloomberg.net.

Last Updated: March 18, 2008 14:55 EDT