8-KOther Events

Fidelity National Information Services, Inc. 8-K Report, Corporate Update (Jan 11, 2013)

Filed January 11, 2013For Securities:FIS

Summary

Fidelity National Information Services, Inc. (FIS) announced the full repayment of its $250 million Term Loan A-2 facility on January 11, 2013. This repayment fulfills a key condition for the release of collateral previously pledged under its credit agreement. The release of this collateral is contingent upon FIS maintaining certain corporate credit ratings from Moody's and Standard & Poor's (S&P), alongside the absence of any ongoing defaults. This action signals a strengthening financial position for FIS. The positive outlook previously assigned by S&P, reflecting expectations of an investment-grade capital structure, becomes more relevant with this debt reduction. While an upgrade to investment grade is not guaranteed, the repayment of this significant loan brings FIS closer to potentially achieving that status, which could lead to improved borrowing costs and enhanced financial flexibility in the future.

Key Highlights

  • 1FIS fully repaid $250 million in outstanding Term Loan A-2 debt on January 11, 2013.
  • 2This repayment satisfies a key condition for the release of collateral under the FIS Credit Agreement.
  • 3The collateral release is conditional on maintaining specific credit ratings from Moody's and S&P, and the absence of defaults.
  • 4The repayment moves FIS closer to potentially meeting the requirements for collateral release, which is tied to credit ratings.
  • 5S&P had previously assigned a positive outlook to FIS in April 2012, anticipating an investment-grade capital structure.
  • 6The company's financial flexibility and borrowing capacity may improve if credit ratings are upgraded.

Frequently Asked Questions

The primary purpose of this 8-K filing was to announce Fidelity National Information Services, Inc. (FIS) has fully repaid its $250 million Term Loan A-2 facility on January 11, 2013, and to inform investors about the implications regarding the release of pledged collateral.

The repayment of the $250 million Term Loan A-2 is a significant step towards the release of collateral pledged by FIS and its subsidiaries. This release is automated under the credit agreement once specific credit rating thresholds are met and no defaults are outstanding.

The collateral will be released if (i) FIS's corporate credit ratings are at least Baa3 from Moody's and BB+ from S&P, or BBB- from S&P and Ba1 from Moody's; (ii) the Term Loan A-2 has been repaid in full (which has now occurred); and (iii) no Default or Event of Default is continuing. The ratings requirement is the remaining key condition.

S&P's positive outlook, assigned in April 2012, suggests they expect FIS to achieve an investment-grade capital structure. The repayment of the Term Loan A-2 strengthens FIS's balance sheet and potentially helps it meet the criteria for this upgrade and the subsequent collateral release.