FIS Announces $2.25 Billion Senior Note Tender Offers for Certain Outstanding Senior Notes
- None.
- None.
Insights
The announcement by Fidelity National Information Services (FIS) regarding their tender offer for certain series of their outstanding senior notes is a strategic financial move that could impact their debt structure and capital allocation. The buyback of up to $2,250,000,000 in aggregate principal amount of senior notes is significant, as it represents a proactive approach to managing the company's debt obligations.
From a financial perspective, this transaction could potentially reduce the company's interest expenses, depending on the interest rates of the repurchased notes relative to current market rates. The acceptance priority levels indicate a structured approach to which notes will be targeted first, potentially allowing FIS to optimize the cost-effectiveness of the buyback. The fixed spreads over reference securities provide insight into the premium FIS is willing to pay over the benchmark rates, which is a key consideration for bondholders assessing the attractiveness of the offer.
The tender offer's success will depend on market conditions and the perceived value by the note holders. If the offer is well-received and the company retires a substantial amount of debt, it could lead to an improved debt-to-equity ratio and potentially a more favorable credit rating. However, investors should also consider the liquidity implications as the company is using a substantial amount of cash to buy back debt, which could have been allocated to other growth opportunities or shareholder returns.
The tender offer by FIS involves a complex financial operation that hinges on the interplay between the fixed spreads, the reference securities and the interpolated rates for the determination of the total consideration for each series of notes. The structure of the offer, including the non-proration clause, suggests FIS's commitment to repurchasing the full amount of any series of notes tendered within the acceptance priority level. This could be indicative of a robust demand forecast or a strategic preference for certain maturities.
The utilization of interpolated rates for some of the notes suggests a precise calibration of the buyback price to the current market conditions, which is particularly relevant for notes without a direct benchmark security. This method ensures that the buyback price is fair and reflective of the prevailing market environment.
Moreover, the offer's conditions, such as the Maximum Purchase Condition, play a crucial role in the execution of the buyback. The possibility of FIS waiving or increasing the Maximum Purchase Amount could lead to fluctuations in the secondary market pricing of these notes. Market participants will closely monitor the offer's progress and any subsequent announcements, as they could influence the pricing dynamics and liquidity of FIS's outstanding debt securities.
The tender offer reflects FIS's broader strategic initiatives within the financial services technology sector. By reducing long-term debt, the company may be aiming to achieve a more flexible capital structure to support its growth and investment strategies. The offer could signal to the market FIS's confidence in its cash flow generation capabilities and its commitment to maintaining a balanced approach between growth and financial health.
The impact on the stock market will depend on investor perception of the tender offer's implications for FIS's financial stability and growth prospects. A successful tender offer that leads to debt reduction without adversely affecting the company's operational capabilities could be viewed positively by equity investors. Conversely, if the market interprets the buyback as a sign of limited investment opportunities or a defensive move in anticipation of a challenging economic environment, the stock could face downward pressure.
It is also important to note the broader market context in which this offer is taking place. The current interest rate environment and the overall health of the credit markets will influence the success of the tender offer and the subsequent performance of FIS's stock. Investors will likely scrutinize the company's post-offer financial metrics, such as leverage ratios and interest coverage, to reassess its risk profile and investment attractiveness.
The Offers are made upon the terms and subject to the conditions set forth in the Offer to Purchase dated February 27, 2024 relating to the Notes (the “Offer to Purchase”) and the accompanying notice of guaranteed delivery (the “Notice of Guaranteed Delivery” and, together with the Offer to Purchase, the “Tender Offer Documents”). Capitalized terms used but not defined in this announcement have the meanings given to them in the Offer to Purchase.
Acceptance Priority
|
Title of Security |
CUSIP/ISIN |
Par Call Date(2 ) |
Maturity Date |
Principal
|
Interpolated
|
Reference
|
Bloomberg
|
Fixed
|
1 |
|
31620MBH8/
|
02/21/2031 |
05/21/2031 |
|
N/A |
UKT |
FIT GLT0-10 |
+65 bps |
2 |
|
31620MBN5/
|
09/03/2029 |
12/03/2029 |
|
N/A |
UKT |
FIT GLT0-10 |
+45 bps |
3 |
|
31620MBJ4/ US31620MBJ45 |
02/21/2029 |
05/21/2029 |
|
N/A |
UST |
PX1 |
+35 bps |
4 |
|
31620MBT2/ US31620MBT27 |
12/01/2030 |
03/01/2031 |
|
N/A |
UST |
PX1 |
+70 bps |
5 |
|
31620MBV7/ US31620MBV72 |
N/A |
07/15/2025 |
|
N/A |
UST |
PX3 |
+25 bps |
6 |
|
31620MBW5/
|
06/15/2027 |
07/15/2027 |
|
N/A |
UST |
PX1 |
+45 bps |
7 |
|
31620MBZ8/
|
01/15/2052 |
07/15/2052 |
|
N/A |
UST |
PX1 |
+110 bps |
8 |
|
31620MAZ9/ US31620MAZ95 |
11/15/2047 |
05/15/2048 |
|
N/A |
UST |
PX1 |
+140 bps |
9 |
|
31620MAU0/
|
02/15/2046 |
08/15/2046 |
|
N/A |
UST |
PX1 |
+125 bps |
10 |
|
31620MBF2/
|
02/21/2039 |
05/21/2039 |
|
May 2039 Interpolated Rate |
N/A |
IRSB EU (Pricing Source: BGN) |
+80 bps |
11 |
|
31620MBY1/
|
04/15/2032 |
07/15/2032 |
|
N/A |
UST |
PX1 |
+70 bps |
12 |
|
31620MAY2/ US31620MAY21 |
02/15/2028 |
05/15/2028 |
|
N/A |
UST |
PX1 |
+95 bps |
13 |
|
31620MBU9/
|
09/01/2040 |
03/01/2041 |
|
N/A |
UST |
PX1 |
+105 bps |
14 |
|
31620MBE5/
|
02/21/2030 |
05/21/2030 |
|
May 2030 Interpolated Rate |
N/A |
IRSB EU (Pricing Source: BGN) |
+80 bps |
(1) |
|
Subject to the satisfaction or waiver of the conditions of the Offers described in the Offer to Purchase, if the Maximum Purchase Condition (as defined below) is not satisfied with respect to every series of Notes, FIS will accept Notes for purchase in the order of their respective Acceptance Priority Level specified in the table above (with 1 being the highest Acceptance Priority Level and 14 being the lowest Acceptance Priority Level). It is possible that a series of Notes with a particular Acceptance Priority Level will not be accepted for purchase even if one or more series with a higher or lower Acceptance Priority Level are accepted for purchase. |
|
|
|
(2) |
|
For each series of Notes in respect of which a par call date is indicated, the calculation of the applicable Total Consideration (as defined below) will be performed taking into account such par call date. |
|
|
|
(3) |
|
The Total Consideration for each series of Notes (such consideration, the “Total Consideration”) payable per each |
|
|
|
|
|
The May 2039 Interpolated Rate means in the case of |
|
|
|
|
|
The May 2030 Interpolated Rate means in the case of |
The Notes denominated in
For Holders who deliver a Notice of Guaranteed Delivery and all other required documentation at or prior to the Expiration Date, upon the terms and subject to the conditions set forth in the Tender Offer Documents, the deadline to validly tender Notes using the Guaranteed Delivery Procedures (as defined in the Offer to Purchase) will be the second business day after the Expiration Date and is expected to be 5:00 p.m. (Eastern time) on March 6, 2024, unless extended with respect to any Offer (the “Guaranteed Delivery Date”).
The Initial Settlement Date will be the third business day after the Expiration Date and is expected to be March 7, 2024. The Guaranteed Delivery Settlement Date will be the second business day after the Guaranteed Delivery Date and is expected to be March 8, 2024. Each of the Initial Settlement Date and the Guaranteed Delivery Settlement Date is herein referred to as a “Settlement Date.”
Upon the terms and subject to the conditions set forth in the Offer to Purchase, Holders whose Notes are accepted for purchase in the Offers will receive the applicable Total Consideration for each
In addition to the applicable Total Consideration, Holders whose Notes are accepted for purchase will receive a cash payment equal to the accrued and unpaid interest on such Notes from and including the immediately preceding interest payment date for such Notes to, but excluding, the Initial Settlement Date (the “Accrued Coupon Payment”). Interest will cease to accrue on the Initial Settlement Date for all Notes accepted in the Offers, and Holders whose Notes are tendered pursuant to the Guaranteed Delivery Procedures and are accepted for purchase will not receive payment in respect of any interest for the period from and including the Initial Settlement Date. Under no circumstances will any interest be payable because of any delay in the transmission of funds to Holders by any Clearing System or its participants.
The Company’s obligation to complete an Offer with respect to a particular series of Notes validly tendered is conditioned on the satisfaction of conditions described in the Offer to Purchase, including that the aggregate principal amount purchased for the Offers (the “Aggregate Purchase Amount”) not exceed
For purposes of applying the Maximum Purchase Amount with respect to the Euro Notes, FIS intends to use a conversion rate of
If the Maximum Purchase Condition is not satisfied with respect to each series of Notes, for (i) a series of Notes (the “First Non-Covered Notes”) for which the Maximum Purchase Amount is less than the sum of (x) the Aggregate Purchase Amount for all validly tendered First Non-Covered Notes and (y) the Aggregate Purchase Amount for all validly tendered Notes of all series having a higher Acceptance Priority Level as set forth in the table above (with 1 being the highest Acceptance Priority Level and 14 being the lowest Acceptance Priority Level) than the First Non-Covered Notes, and (ii) all series of Notes with an Acceptance Priority Level lower than the First Non-Covered Notes (together with the First Non-Covered Notes, the “Non- Covered Notes”), FIS may, at any time on or prior to the Expiration Time:
(a) terminate an Offer with respect to one or more series of Non-Covered Notes for which the Maximum Purchase Condition has not been satisfied, and promptly return all validly tendered Notes of such series, and any other series of Non-Covered Notes, to the respective tendering Holders; or
(b) waive the Maximum Purchase Condition with respect to one or more series of Non-Covered Notes and accept all Notes of such series, and of any series of Notes having a higher Acceptance Priority Level, validly tendered; or
(c) if there is any series of Non-Covered Notes with a lower Acceptance Priority Level than the First Non-Covered Notes for which:
(i) the Aggregate Purchase Amount necessary to purchase all validly tendered Notes of such series, plus
(ii) the Aggregate Purchase Amount necessary to purchase all validly tendered Notes of all series having a higher Acceptance Priority Level than such series of Notes, other than any series of Non-Covered Notes that has or have not also been accepted as contemplated by this clause (c), is equal to, or less than, the Maximum Purchase Amount, accept all validly tendered Notes of all such series having a lower Acceptance Priority Level, until there is no series of Notes with a higher or lower Acceptance Priority Level to be considered for purchase for which the conditions set forth above are met.
It is possible that a series of Notes with a particular Acceptance Priority Level will fail to meet the conditions set forth above and therefore will not be accepted for purchase even if one or more series with a higher or lower Acceptance Priority Level are accepted for purchase.
For purposes of determining whether the Maximum Purchase Condition is satisfied, FIS will assume that all Notes tendered pursuant to the Guaranteed Delivery Procedures will be duly delivered at or prior to the Guaranteed Delivery Time and FIS will not subsequently adjust the acceptance of the Notes in accordance with the Acceptance Priority Levels if any such Notes are not so delivered. FIS reserves the right, subject to applicable law, to waive the Maximum Purchase Condition with respect to any Offer.
The Offers are subject to the satisfaction of these conditions and certain other conditions. FIS reserves the right, subject to applicable law, to waive any and all conditions to any Offer. If any of the conditions is not satisfied, FIS is not obligated to accept for payment, purchase or pay for, and may delay the acceptance for payment of, any tendered notes, in each event subject to applicable laws, and may terminate or alter any or all of the Offers. The Offers are not conditioned on the tender of any aggregate minimum principal amount of Notes of any series (subject to minimum denomination requirements as set forth in the Offer to Purchase).
FIS has retained Citigroup Global Markets Inc., J.P. Morgan Securities LLC, J.P. Morgan Securities plc, MUFG Securities Americas Inc. and
D.F. King & Co, Inc. will act as the Information and Tender Agent for the Offers. Questions or requests for assistance related to the Offers or for additional copies of the Offer to Purchase may be directed to D.F. King & Co, Inc. in
If FIS terminates any Offer with respect to one or more series of Notes, it will give prompt notice to the Information and Tender Agent, and all Notes tendered pursuant to such terminated Offer will be returned promptly to the tendering Holders thereof. With effect from such termination, any Notes blocked in the applicable Clearing System will be released.
Holders are advised to check with any bank, securities broker or other intermediary through which they hold Notes as to when such intermediary would need to receive instructions from a beneficial owner in order for that Holder to be able to participate in, or withdraw their instruction to participate in the Offers before the deadlines specified herein and in the Offer to Purchase. The deadlines set by any such intermediary and the applicable Clearing System for the submission and withdrawal of tender instructions will also be earlier than the relevant deadlines specified herein and in the Offer to Purchase.
This announcement is for informational purposes only. This announcement is not an offer to purchase or a solicitation of an offer to sell any Notes or any other securities of the Company or any of its subsidiaries. The Offers are being made solely pursuant to the Offer to Purchase. The Offers are not being made to Holders of Notes in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction. In any jurisdiction in which the securities laws or blue sky laws require the Offers to be made by a licensed broker or dealer, the Offers will be deemed to have been made on behalf of the Company by the dealer managers or one or more registered brokers or dealers that are licensed under the laws of such jurisdiction.
No action has been or will be taken in any jurisdiction that would permit the possession, circulation or distribution of either this announcement, the Offer to Purchase or any material relating to us or the Notes in any jurisdiction where action for that purpose is required. Accordingly, neither this announcement, the Offer to Purchase nor any other offering material or advertisements in connection with the Offers may be distributed or published, in or from any such country or jurisdiction, except in compliance with any applicable rules or regulations of any such country or jurisdiction.
FIS is a leading global provider of financial services technology solutions for financial institutions, businesses and developers. We improve the digital transformation of our financial economy, advancing the way the world pays, banks and invests. We provide the confidence made possible when reliability meets innovation, helping our clients run, grow and protect their business. Headquartered in
Forward-looking Statements
This news release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. Forward-looking statements are based on management’s beliefs, as well as assumptions made by, and information currently available to, management. Because such statements are based on expectations as to future events and are not statements of fact, actual results may differ materially from those projected. FIS undertakes no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to, the risks related to the acceptance of any tendered Notes, the expiration and settlement of the Offers, the satisfaction of conditions to the Offers, whether the Offers will be consummated in accordance with the terms set forth in the Offer to Purchase or at all and the timing of any of the foregoing, and other risks detailed in the “Statement Regarding Forward-Looking Information,” “Risk Factors” and other sections of FIS’ Form 10-K for the fiscal year ended December 31, 2023 and FIS’ other filings with the Securities and Exchange Commission.
Notice to Certain Non-
Neither this announcement nor the Offer to Purchase constitute an offer or an invitation by, or on behalf of, the Company or by, or on behalf of, the dealer managers to participate in the Offers in any jurisdiction in which it is unlawful to make such an offer or solicitation in such jurisdiction. The distribution of this announcement or the Offer to Purchase may be restricted by law in certain jurisdictions. Persons into whose possession this announcement or the Offer to Purchase come are required by the Company and the dealer managers to inform themselves about and to observe any such restrictions. This announcement or the Offer to Purchase may not be used for or in connection with an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorized or to any person to whom it is unlawful to make such offer or solicitation.
The communication of this announcement, the Offer to Purchase and any other documents or materials relating to the Offers is not being made by, and such documents and/or materials have not been approved, by an authorized person for the purposes of section 21 of the Financial Services and Markets Act 2000, as amended. Accordingly, such documents and/or materials are not being distributed to, and must not be passed on to, the general public in the
The Offers are not being made, directly or indirectly, to the public in
The Offers do not constitute a public offering within the meaning of Articles 3, §1, 1° and 6, §1, of the Belgian Takeover Law. The Offers are exclusively conducted under applicable private placement exemptions and have therefore not been, and will not be, notified to, and neither this announcement, the Offer to Purchase nor any other document or material relating to the Offers have been, or will be, approved by the Belgian Financial Services and Markets Authority (Autorité des Services et Marchés Financiers/Autoriteit voor Financiële Diensten en Markten). Accordingly, the Offers, this announcement, the Offer to Purchase, any memorandum, information circular, brochure or any similar documents relating to the Offers may not be advertised, offered or distributed, directly or indirectly, to any person located and/or resident in
None of the Offers, this announcement, the Offer to Purchase or any other documents or materials relating to the Offers has been or will be submitted to the clearance procedure of the CONSOB, pursuant to applicable Italian laws and regulations.
The Offers are being carried out in
Holders or beneficial owners of the Notes that are a resident of and/or located in
Each intermediary must comply with the applicable laws and regulations concerning information duties vis-à-vis its clients in connection with the Notes or the Offers.
View source version on businesswire.com: https://www.businesswire.com/news/home/20240227783025/en/
Fidelity National Information Services
Ellyn Raftery, 904.438.6083
Chief Marketing & Communications Officer
FIS Global Marketing & Corporate Communications
Ellyn.Raftery@fisglobal.com
or
George Mihalos, 904.438.6438
Senior Vice President
FIS Investor Relations
Georgios.Mihalos@fisglobal.com
Source: Fidelity National Information Services
FAQ
What is the purpose of FIS initiating the Offers?
How many separate offers are included in the announcement?
What are the conditions for the Offers?
What is the maximum purchase amount for the Offers?