8-KMaterial AgreementsFinancial EventsOther Events+1

FISERV INC 8-K Report, Material Agreement (Sep 25, 2012)

Filed September 25, 2012For Securities:FISV

Summary

Fiserv, Inc. (FISV) filed an 8-K on September 25, 2012, reporting the completion of a $700 million senior notes offering. These 3.500% Senior Notes due 2022 were issued under an Indenture and are guaranteed by certain wholly-owned domestic subsidiaries. The primary purpose of this debt issuance was to repay a portion of the Company's Term Loan Facility maturing in November 2012. Investors should note the terms of the notes, including the interest rate, maturity date, and redemption provisions. The notes can be redeemed by Fiserv at a "make-whole" price before July 1, 2022, or at par thereafter. A significant provision for investors is the requirement for Fiserv to offer to repurchase the notes at 101% of principal in the event of a change of control triggering event, providing a degree of protection.

Key Highlights

  • 1Fiserv, Inc. successfully closed a $700 million offering of 3.500% Senior Notes due October 1, 2022.
  • 2The net proceeds from the offering are intended to repay a portion of the Company's Term Loan Facility maturing in November 2012.
  • 3The notes are guaranteed by certain of Fiserv's wholly-owned domestic subsidiaries on a senior unsecured basis.
  • 4The interest rate is fixed at 3.500% per annum, payable semi-annually.
  • 5Fiserv has the option to redeem the notes at a make-whole price prior to July 1, 2022, and at par on or after July 1, 2022.
  • 6A change of control triggering event requires Fiserv to offer to repurchase the notes at 101% of their principal amount, plus accrued interest.

Frequently Asked Questions

The primary purpose of the $700 million senior notes offering is to repay a portion of Fiserv's Term Loan Facility that was set to mature in November 2012. This suggests a refinancing of existing debt.

The notes bear a fixed interest rate of 3.500% per year, payable semi-annually on April 1 and October 1, with the first payment on April 1, 2013. They mature on October 1, 2022. The interest rate is subject to adjustment if debt ratings change.

In the event of a change of control triggering event, Fiserv is obligated to offer to repurchase the notes at 101% of their aggregate principal amount, plus any accrued and unpaid interest. This provides a premium for bondholders in such a scenario.

Yes, Fiserv can redeem the notes. Prior to July 1, 2022, they can be redeemed at a 'make-whole' price, which typically includes a premium over the remaining principal. On or after July 1, 2022, the notes can be redeemed at 100% of the principal amount.