8-KMaterial AgreementsFinancial EventsOther Events+1

FISERV INC 8-K Report, Material Agreement (Jul 1, 2019)

Filed July 1, 2019For Securities:FISV

Summary

Fiserv, Inc. (FISV) filed an 8-K on July 1, 2019, to report the successful closing of a significant offering of senior notes denominated in both Euros and Pounds Sterling. This offering includes €1.5 billion across three tranches maturing in 2023, 2027, and 2030, with coupon rates ranging from 0.375% to 1.625%. Additionally, the company issued £1.05 billion in notes maturing in 2025 and 2031, carrying coupon rates of 2.250% and 3.000%, respectively. These notes were issued under a supplemented indenture and are subject to standard provisions including optional redemption and a repurchase obligation upon a change of control triggering event. Notably, the notes are also subject to a special mandatory redemption at 101% of principal if the previously announced merger with First Data Corporation is not consummated by April 16, 2020. This offering represents a substantial financing event for Fiserv, likely to fund ongoing operations or strategic initiatives.

Key Highlights

  • 1Fiserv successfully closed a public offering of €1.5 billion and £1.05 billion in senior notes.
  • 2The Euro notes consist of €500 million each, maturing in 2023 (0.375%), 2027 (1.125%), and 2030 (1.625%).
  • 3The Sterling notes consist of £525 million each, maturing in 2025 (2.250%) and 2031 (3.000%).
  • 4The notes were issued under an existing Indenture, supplemented by five new supplemental indentures specific to each note series.
  • 5A 'Special Mandatory Redemption' clause requires Fiserv to redeem all notes at 101% of principal if the merger with First Data is not completed by April 16, 2020.
  • 6The notes are subject to optional redemption by Fiserv and mandatory repurchase at 101% of principal upon a change of control triggering event.
  • 7The filing incorporates the details of the notes and indentures as exhibits to the report.

Frequently Asked Questions

This 8-K filing announces the closing of Fiserv's public offering and issuance of senior notes denominated in Euros and Pounds Sterling. It details the principal amounts, interest rates, and maturity dates for each series of notes, as well as key terms and conditions.

The primary financial obligations are the principal amounts of the issued notes, totaling €1.5 billion and £1.05 billion. Fiserv is obligated to pay annual interest on these notes and repay the principal at maturity, subject to specific redemption and repurchase provisions.

The 'Special Mandatory Redemption' clause is significant because it links the repayment of these notes to the successful consummation of Fiserv's announced merger with First Data Corporation. If the merger is not completed by April 16, 2020, Fiserv must redeem all outstanding notes at a premium (101% of principal plus accrued interest), which could represent a substantial cash outflow if the merger is terminated.

This offering increases Fiserv's total debt by €1.5 billion and £1.05 billion. The issuance of notes with varying maturities diversifies the company's debt maturity profile. The low coupon rates suggest favorable borrowing costs. However, the mandatory redemption clause tied to the First Data merger introduces an event-specific risk that could trigger early repayment under certain circumstances.