8-KMaterial AgreementsFinancial EventsOther Events+1

Fidelity National Information Services, Inc. 8-K Report, Material Agreement (Mar 20, 2012)

Filed March 20, 2012For Securities:FIS

Summary

Fidelity National Information Services, Inc. (FIS) announced on March 20, 2012, the successful closing of a private offering of $700 million aggregate principal amount of 5.0% Senior Notes due March 15, 2022. These notes were offered to qualified institutional buyers and non-U.S. persons, and the proceeds are intended for refinancing existing indebtedness and covering associated fees and expenses. The issuance represents a significant debt financing activity for FIS, aimed at managing its capital structure. The notes are senior unsecured obligations, guaranteed by certain subsidiaries, and rank equally with existing senior debt but junior to secured debt and debt of non-guarantor subsidiaries. The Indenture includes covenants that restrict FIS's ability to incur additional debt, make restricted payments, create liens, and engage in certain other corporate actions, though these can be suspended if the notes achieve an investment grade rating. FIS is also obligated to offer to repurchase the notes in the event of certain change of control or asset sale scenarios.

Key Highlights

  • 1FIS issued $700 million in 5.0% Senior Notes due March 15, 2022, via a private offering.
  • 2Proceeds from the offering will be used to refinance existing indebtedness and pay related fees and expenses.
  • 3The notes are senior unsecured obligations, fully and unconditionally guaranteed by certain subsidiaries.
  • 4The Indenture imposes various covenants restricting debt incurrence, restricted payments, liens, and other corporate actions.
  • 5Covenants may be suspended if the notes achieve an Investment Grade Rating from both Moody's and S&P.
  • 6FIS is obligated to offer to repurchase the notes under specific change of control and asset sale conditions.
  • 7FIS entered into a Registration Rights Agreement to file an exchange offer registration statement for the notes.

Frequently Asked Questions

The primary purpose of issuing these 5.0% Senior Notes due 2022 is to refinance certain of FIS's existing indebtedness and to cover associated fees and expenses related to the offering. This is a common strategy for companies to manage their debt obligations and potentially lower their cost of capital.

The notes carry a 5.0% annual interest rate, payable semi-annually. They are senior unsecured obligations guaranteed by certain subsidiaries. Important provisions include covenants that limit the company's ability to incur additional debt, make restricted payments, and create liens. FIS is also required to offer to repurchase the notes upon certain change of control events or asset sales.

The Registration Rights Agreement obligates FIS to file an exchange offer registration statement with the SEC to exchange these privately placed notes for substantially identical notes that are freely tradable in the public market. This process is intended to provide liquidity for investors who purchased the notes in the private offering. Failure to meet registration deadlines could result in FIS paying additional interest.

Yes, the Indenture includes a provision where certain covenants will be suspended if the 2022 Notes receive an Investment Grade Rating from both Standard & Poor's Rating Services and Moody's Investors Service, and no default is continuing. This could provide FIS with greater financial flexibility.