Filing Summary: Fidelity National Information Services, Inc. (FIS)
Business Context and Reporting Period
This Form 8-K was filed on August 21, 2015, by Fidelity National Information Services, Inc. (FIS). The report details the entry into a material definitive agreement regarding the company's credit facilities in connection with its pending acquisition of SunGard.
Key Financial Metrics and Debt Structure
The filing focuses on amendments to the company's credit agreement rather than reporting operational financial results such as revenue or profit. Key debt-related metrics include:
- Maximum Leverage Ratio: Adjusted to 4.25x as of the SunGard Closing Date, with step-downs to 3.50x thereafter.
- Acquisition Financing Treatment: Debt raised specifically to finance the SunGard Acquisition will be excluded from the Maximum Leverage Ratio calculation until the closing date (or 35 days after termination of the merger agreement if the deal does not close).
- Interest and Fees: Loans bear interest based on a ratings-based pricing grid. Revolving credit commitments are subject to a commitment fee on the unused portion, also based on a ratings-based pricing grid.
Material Changes Versus Prior Period
The primary material change is the Sixth Amendment to the Credit Agreement, modifying the existing terms to accommodate the SunGard Acquisition. Specific changes include:
- Increased leverage ratio covenant to 4.25x temporarily.
- Introduction of a "springing guaranty" provision: If SunGard Notes remain post-closing, the issuer must provide a guaranty of the Amended Credit Agreement effective 90 days after the closing date.
- Specification that borrowing revolving loans for the acquisition on the closing date is subject to limited conditionality customary in acquisition financings.
Outlook, Risks, and Unusual Items
Outlook and Management Commentary: FIS intends to file a Registration Statement on Form S-4 containing a consent solicitation statement for SunGard stockholders. The company urges SunGard stockholders to read these materials for important information regarding the proposed transaction.
Risks and Contingencies: The amended credit terms are contingent on the closing of the SunGard Acquisition. If the transaction terminates, the leverage ratio exclusion for acquisition debt expires 35 days after the termination of the Agreement and Plan of Merger.
Key Facts for Investor Verification
- Verify the final terms of the SunGard Acquisition and the expected closing date.
- Monitor the Form S-4 filing for the consent solicitation statement and prospectus.
- Confirm the impact of the 4.25x leverage ratio on future borrowing capacity and covenant compliance.
- Review the "springing guaranty" conditions regarding SunGard Notes post-acquisition.