Business Context and Reporting Period
This Form 8-K Current Report, dated June 29, 2010, details material definitive agreements entered into by Fidelity National Information Services, Inc. (FIS). The filing primarily concerns the amendment and restatement of the company's credit facility and a concurrent amendment to its receivables purchase agreement.
Key Financial Metrics and Debt Structure
The filing outlines a significant restructuring of FIS's committed capital, totaling $3,426.0 million under the new FIS Credit Agreement. The capital structure is comprised of:
- Revolving Credit Facilities: $1,033.7 million aggregate maximum principal.
- $112.3 million maturing January 18, 2012.
- $921.4 million maturing July 18, 2014.
- Term Loan A: $2,390.4 million aggregate.
- $386.8 million (Term Loan A-1) maturing January 18, 2012.
- $2,003.6 million (Term Loan A-2) maturing July 18, 2014.
- LCPI Loans: $1.9 million maturing July 18, 2014.
As of June 30, 2010, the outstanding principal balance on the Revolving Loan was $310.8 million, leaving $722.9 million of borrowing capacity available. The agreement includes provisions for potential future borrowing of up to $2,837.2 million in Term Loan B and an additional $750 million in term and revolving credit, subject to lender commitments.
Material Changes Versus Prior Period
The Amendment Agreement resulted in an increase of $562.8 million in term loans (Incremental Term Loan A) and $141.2 million in revolving credit commitments compared to the prior credit agreement. Proceeds from the Incremental Term Loan A were utilized to prepay a portion of the outstanding principal of a term loan acquired during the Metavante acquisition (MV Term Loan). Following this prepayment, the outstanding balance of the MV Term Loan was $230.0 million, with no remaining mandatory quarterly principal payments.
Outlook, Risks, and Covenants
The FIS Credit Agreement is subject to customary affirmative, negative, and financial covenants, including limits on liens, indebtedness, investments, and restricted payments. Key financial covenants include a minimum interest coverage ratio and a maximum leverage ratio. Interest rates are variable, based on the Eurocurrency Rate or Base Rate plus a margin determined by the company's leverage ratio (Total Indebtedness to EBITDA).
Events of default include failure to pay principal and interest and breaches of covenants. The agreement is guaranteed by substantially all domestic subsidiaries (excluding FIS Receivables SPV, LLC) and secured by pledges of capital stock in domestic and certain foreign entities.
Investor Verification Checklist
- Verify the specific leverage ratio thresholds that trigger changes in interest rate margins and facility fees.
- Confirm the status of the $2,837.2 million Term Loan B availability and any conditions precedent required to draw on it.
- Review the full text of Exhibit 10.1 (Amendment and Restatement Agreement) for detailed covenant definitions and exceptions.
- Monitor the remaining balance and maturity of the MV Term Loan ($230.0 million due November 1, 2014).
- Assess the impact of the revised covenants on future dividend restrictions and capital expenditures.