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Fidelity National Information Services, Inc. 8-K Report, Material Agreement (May 6, 2025)

Filed May 6, 2025For Securities:FIS

Summary

Fidelity National Information Services, Inc. (FIS) has entered into a $8,000,000,000 senior unsecured Term Loan Credit Agreement with Goldman Sachs Bank USA as administrative agent and other financial institutions. This new facility will mature 364 days after borrowing and is intended to fund the acquisition of the Issuer Solutions Business and related transaction costs. The introduction of this term loan replaces a previously arranged bridge loan facility, indicating progress in the company's financing strategy for this significant acquisition. Investors should note the key terms of the loan, including its interest rate structure which offers a choice between SOFR-based or Base Rate-based pricing, both subject to a margin dependent on FIS's debt rating. The agreement includes standard covenants for this type of financing, with a key financial covenant being a maximum leverage ratio of 3.75 to 1.00, which can be adjusted post-acquisition. The flexibility for voluntary prepayments and mandatory reductions based on asset sales or further financing provides some financial maneuverability.

Key Highlights

  • 1FIS secured an $8 billion senior unsecured Term Loan Agreement maturing in 364 days.
  • 2Proceeds are designated for the acquisition of the Issuer Solutions Business and associated transaction expenses.
  • 3The new Term Loan Agreement supersedes a prior $8 billion bridge loan commitment from Goldman Sachs and Wells Fargo.
  • 4Interest rates are variable, offering a choice between Term SOFR Rate or Base Rate, plus a margin that adjusts with FIS's debt rating.
  • 5The loan agreement includes customary affirmative, negative, and financial covenants.
  • 6A key financial covenant requires FIS to maintain a maximum leverage ratio of 3.75:1.00, with potential for adjustment.
  • 7The company has flexibility for voluntary prepayments and mandatory reductions in loan amounts.

Frequently Asked Questions

The primary purpose of the $8 billion Term Loan is to fund the cash consideration for Fidelity National Information Services, Inc.'s previously announced acquisition of the Issuer Solutions Business and to cover associated fees, costs, and expenses related to this transaction.

The Term Loan is a senior unsecured facility for up to $8 billion, maturing 364 days after borrowing. Interest rates can be based on the Term SOFR Rate or Base Rate, plus a margin tied to FIS's debt rating. The agreement includes standard covenants and a maximum leverage ratio of 3.75:1.00, which can be adjusted after certain acquisitions. Prepayments are permitted.

This new Term Loan Agreement effectively replaces the $8 billion bridge loan facility that had been committed by Goldman Sachs Bank USA and Wells Fargo Bank, National Association. The commitments for the bridge facility were reduced to $0 upon the execution of the Term Loan Agreement.

FIS has flexibility through the ability to voluntarily prepay the Term Loans at any time without penalty, subject to certain notice and minimum dollar requirements, and potential SOFR breakage charges. Additionally, the loan is subject to mandatory reductions from the issuance of certain equity and debt, or from asset sales.