8-KMaterial AgreementsFinancial EventsOther Events+1

Fidelity National Information Services, Inc. 8-K Report, Material Agreement (Mar 4, 2021)

Filed March 4, 2021For Securities:FIS

Summary

Fidelity National Information Services, Inc. (FIS) filed an 8-K on March 4, 2021, reporting significant updates regarding its debt structure. The company entered into a Fourth Amendment Agreement to its Seventh Amended and Restated Credit Agreement, extending the maturity date to March 2, 2026. This amendment also introduces a stepped-down leverage ratio requirement, aiming for a maximum of 3.50:1.00 by the end of 2021, alongside specific caps on cash-netting for leverage ratio calculations. In addition to the credit facility amendment, FIS announced the successful settlement of its "Any and All Tender Offer" for various senior notes. The company repurchased a substantial principal amount across multiple note series maturing in 2021, 2023, 2024, 2025, and 2026. Notes not tendered and accepted in the offer have been called for redemption on scheduled dates in March and April 2021. These actions indicate FIS is actively managing its debt portfolio and improving its capital structure.

Key Highlights

  • 1FIS extended its credit agreement maturity date to March 2, 2026, via a Fourth Amendment.
  • 2New, progressively stricter leverage ratio covenants are introduced, stepping down to 3.50:1.00 by December 31, 2021.
  • 3The company completed a significant "Any and All Tender Offer" to repurchase various outstanding senior notes.
  • 4Substantial principal amounts of Floating Rate Senior Notes due 2021, 0.125% Senior Notes due 2021, and 3.000% Senior Notes due 2026 were accepted for purchase.
  • 5FIS will redeem remaining untendered notes from the series included in the tender offer.
  • 6The settlement cost for the tender offer was approximately $1.18 billion for dollar notes, €333.5 million for euro notes, and £499.7 million for sterling notes.

Frequently Asked Questions

The primary impact is the extension of the credit agreement's maturity date to March 2, 2026, providing FIS with longer-term access to its revolving credit facility. Additionally, it imposes stricter leverage ratio requirements that step down throughout 2021, suggesting a focus on debt reduction and financial deleveraging.

FIS repurchased its Floating Rate Senior Notes due 2021, 0.125% Senior Notes due 2021, 3.500% Senior Notes due 2023, 3.875% Senior Notes due 2024, 2.602% Senior Notes due 2025 (Sterling), 5.000% Senior Notes due 2025, and 3.000% Senior Notes due 2026. The company has also called for redemption of any notes from these series that were not tendered and accepted.

The cash-netting provisions define how unrestricted cash can be used to reduce the outstanding debt when calculating the leverage ratio. The amendment allows for a substantial amount of cash held domestically ($600 million) and internationally ($800 million) to be considered, providing FIS with flexibility in managing its leverage ratio while potentially holding significant cash balances.

The aggregate purchase price, including accrued interest, for the notes accepted in the tender offer was approximately $1,180,356,453.20 for dollar-denominated notes, €333,506,669.78 for euro-denominated notes, and £499,653,844.09 for sterling-denominated notes.