Business Context and Reporting Period
Company: Fidelity National Information Services, Inc. (FIS)
Filing Type: Form 8-K (Current Report)
Date of Report: September 1, 2015
Event: Entry into a Material Definitive Agreement (Term Loan Credit Agreement) to facilitate the acquisition of SunGard, Inc.
Key Financial Metrics and Debt Structure
This filing details a new debt facility rather than reporting operational financial results (revenue, profit, or cash flow) for a specific period.
- Facility Size: $1.50 billion committed term facility.
- Currency: U.S. Dollars.
- Maturity: Three years from the Initial Funding Date.
- Security Status: Unsecured.
- Interest Rate: Floating rate (Eurocurrency rate or Base rate plus applicable margin and mandatory costs).
- Principal Repayment: No payments due until the Maturity Date.
- Prepayment: Voluntary prepayments permitted without fee (subject to breakage costs for eurocurrency periods); no mandatory prepayment.
Material Changes and Transaction Purpose
The primary material change is the establishment of financing to support the SunGard Acquisition.
- Use of Proceeds:
- Fund part of the consideration for the SunGard Acquisition.
- Pay transaction costs and expenses.
- General corporate purposes.
- Optional: Repay outstanding SunGard Notes if they remain after the closing date.
- Guaranty: A springing guaranty by the issuer of the SunGard Notes may become effective 90 days after the SunGard Closing Date if SunGard Notes remain outstanding.
Covenants, Risks, and Management Commentary
The Credit Agreement includes standard affirmative, negative, and financial covenants.
- Financial Covenants: Includes a minimum interest coverage ratio and a maximum leverage ratio.
- Restrictions: Limits on liens, subsidiary indebtedness, investments, dispositions, dividends, and other restricted payments.
- Events of Default: Include failure to pay principal/interest and breach of covenants, allowing the Administrative Agent to accelerate loan maturity.
- Regulatory Status: FIS intends to file a Registration Statement on Form S-4 containing a consent solicitation statement for SunGard stockholders. The filing explicitly states that the prospectus is not yet available.
Investor Verification Checklist
- Verify the final terms of the SunGard Acquisition and the total consideration amount.
- Review the upcoming Form S-4 Registration Statement for the consent solicitation statement and detailed transaction risks.
- Monitor the credit rating of FIS, as the applicable interest margin is subject to adjustment based on this rating.
- Confirm whether SunGard Notes remain outstanding post-closing to determine if the springing guaranty will be triggered.
- Examine the full text of the Term Loan Credit Agreement (Exhibit 10.1) for specific covenant thresholds.