8-KMaterial AgreementsFinancial EventsExhibits & Filings

FISERV INC 8-K Report, Material Agreement (Nov 28, 2007)

Filed November 28, 2007For Securities:FISV

Summary

Fiserv, Inc. (FISV) has filed an 8-K report detailing the entry into a 364-Day Credit Agreement on November 27, 2007. This agreement establishes an unsecured revolving credit facility of up to $450 million, intended primarily to fund a portion of the acquisition price for CheckFree Corporation and related expenses. The facility's availability is contingent upon the completion of the CheckFree acquisition and the full drawdown of Fiserv's existing revolving credit facility. The credit agreement includes variable interest rates tied to LIBOR or a base rate, and imposes financial covenants, such as limitations on consolidated indebtedness relative to EBITDA and minimum EBITDA to interest expense ratios. The commitment of lenders expires on December 31, 2007, if the CheckFree acquisition has not been completed by then.

Key Highlights

  • 1Fiserv entered into a 364-Day Credit Agreement for up to $450 million on November 27, 2007.
  • 2The credit facility is unsecured and intended to finance part of the CheckFree Corporation acquisition and associated costs.
  • 3Borrowing under the agreement is conditional on the completion of the CheckFree acquisition.
  • 4The credit agreement has a maturity date of November 24, 2008.
  • 5The interest rate is variable, based on LIBOR plus a margin or a base rate.
  • 6Financial covenants include limits on consolidated indebtedness (3.5x-4.5x EBITDA) and minimum EBITDA (3x interest expense).
  • 7Lender commitments expire on December 31, 2007, if the CheckFree acquisition is not completed.

Frequently Asked Questions

The primary purpose of the 364-Day Credit Agreement is to secure funding for a portion of the acquisition price of CheckFree Corporation and to cover related costs, fees, and expenses. It can also be used for general corporate purposes, subject to certain limitations.

The lenders' commitment to provide credit under this agreement expires on December 31, 2007. If the acquisition of CheckFree Corporation has not been completed by this date, the availability of the credit facility will be affected.

Fiserv must adhere to covenants that limit its consolidated indebtedness to a specified multiple of its consolidated EBITDA (ranging from 3.5 to 4.5 times). Additionally, the company must maintain consolidated EBITDA of at least three times its consolidated interest expense on a quarterly basis. These calculations give pro forma effect to acquisitions and dispositions.

Yes, the ability to borrow under the new 364-Day Credit Agreement is conditioned upon Fiserv drawing the full available credit under its existing revolving credit facility.