Fidelity National Information Services, Inc. - 8-K Summary
Business Context and Reporting Period
This Form 8-K, dated December 19, 2011, reports on significant capital structure transactions executed by Fidelity National Information Services, Inc. (FIS). The filing details the amendment and restatement of the company's credit agreement and the issuance of additional senior notes to refinance existing debt and secure new liquidity.
Key Financial Metrics and Debt Structure
The filing focuses on debt refinancing and new issuances rather than operating performance metrics such as revenue or profit. Key debt figures as of December 19, 2011, include:
- Repriced Term B Loans: $1,250.0 million principal amount (refinancing $1,481.3 million of existing loans).
- Term A-2 Loans: $2,150.0 million aggregate outstanding principal.
- 2014 Revolving Credit Commitments: $1,000.0 million aggregate amount.
- Additional Senior Notes: $150.0 million of 7.625% Senior Notes due July 15, 2017.
- Total Funded Loans and Available Commitments: $4,450.0 million (including a pending $50.0 million commitment expected in January 2012).
Material Changes Versus Prior Period
The company executed a comprehensive refinancing of its credit facilities and expanded its bond issuance:
- Interest Rate Reduction: Term B loans were repriced with reduced margins. The Eurocurrency Rate floor was lowered from 1.5% to 1.00%, and the applicable margin was reduced from 3.75% to 3.25%. The Base Rate margin was reduced from 2.75% to 2.25%.
- Debt Maturity Extension: $9.0 million of revolving credit commitments maturing in 2012 were extended to 2014. Additionally, $47.5 million of Term A-1 loans (maturing 2012) were converted to Term A-2 loans (maturing 2014).
- New Debt Issuance: FIS issued an additional $150 million in 7.625% Senior Notes due 2017, increasing the total outstanding amount of this note series.
- Prepayment: FIS prepaid $231.3 million of the excess principal from the existing Term B loans.
Outlook, Management Commentary, and Risks
Use of Proceeds: Proceeds from the new notes and loans are being used to repay the existing Term B loans, terminate 2012 revolving credit commitments, repay Term A-1 loans, and pay associated fees and expenses.
Covenants and Restrictions: The indenture for the Senior Notes includes covenants limiting the company's ability to incur additional indebtedness, make restricted payments, create liens, restrict dividend payments, engage in sale-leaseback transactions, or merge/consolidate without restrictions.
Registration Rights: FIS agreed to file an exchange offer registration statement within 270 days of the issue date to exchange the new notes for registered notes. Failure to meet these obligations may trigger additional interest payments to noteholders.
Redemption Terms: The Additional 2017 Notes may be redeemed prior to July 15, 2013, with a "make-whole" premium. After that date, they may be redeemed at specified prices. Up to 35% of the notes may be redeemed with equity offering proceeds before July 15, 2013.
Investor Verification Checklist
- Verify the exact interest rate savings achieved by the repricing of Term B loans against current market rates.
- Confirm the status of the pending $50.0 million revolving credit commitment expected in January 2012.
- Review the specific covenants in the Fourth Supplemental Indenture to assess restrictions on future capital flexibility.
- Monitor the timeline for the exchange offer registration statement required under the Registration Rights Agreement.
- Assess the impact of the increased fixed-rate debt ($150 million new notes) on the company's overall interest expense profile.