Summary
Fiserv, Inc. (FISV) announced on June 6, 2011, a significant debt financing transaction involving the issuance of new senior notes and a concurrent tender offer to repurchase existing senior notes. The company entered into an Underwriting Agreement to sell $600 million of 3.125% Senior Notes due 2016 and $400 million of 4.750% Senior Notes due 2021, raising a total of $1 billion. The proceeds from this offering are earmarked to fund a tender offer for the company's $1.0 billion aggregate principal amount of 6.125% Senior Notes due 2012.
Key Highlights
- 1Fiserv Inc. successfully raised $1 billion through the issuance of new senior notes maturing in 2016 and 2021.
- 2The new notes carry interest rates of 3.125% (2016 maturity) and 4.750% (2021 maturity).
- 3The company is concurrently launching a tender offer to repurchase its entire $1.0 billion aggregate principal amount of 6.125% Senior Notes due 2012.
- 4The proceeds from the new note issuance will be used to fund the repurchase of the 2012 notes, suggesting a debt restructuring strategy.
- 5Fiserv expects to incur an after-tax loss of approximately $53 million on debt extinguishment related to the tender offer.
- 6The closing of the new note offering is expected on June 14, 2011, with the tender offer set to expire on June 13, 2011, indicating a closely coordinated transaction timeline.
- 7The new debt issuance is registered under a Form S-3 registration statement filed previously with the SEC.
Frequently Asked Questions
This Form 8-K filing announces Fiserv's entry into a material definitive agreement for the issuance of new senior notes and the commencement of a tender offer to repurchase existing senior notes. It's a key disclosure regarding the company's capital structure management and debt financing activities.
Fiserv is issuing $600 million in aggregate principal amount of 3.125% Senior Notes due 2016 and $400 million in aggregate principal amount of 4.750% Senior Notes due 2021. The total proceeds from this issuance will be $1 billion.
The net proceeds from the new note issuance are intended to be used to pay for the cash consideration, including any premium and accrued interest, in connection with a tender offer to purchase its $1.0 billion aggregate principal amount of 6.125% Senior Notes due 2012.
Fiserv anticipates incurring a loss on debt extinguishment of approximately $53 million after tax if the entire $1.0 billion of 6.125% Senior Notes due 2012 are repurchased.