Fidelity National Financial Amends and Extends Its $800 Million Senior Unsecured Revolving Credit Facility

Rhea-AI Summary

Fidelity National Financial, Inc. (FNF) extends its $800 million senior unsecured revolving credit facility, with improved pricing and covenants. Bank of America Securities, J.P. Morgan Chase Bank, N.A., U.S. Bank National Association, and Wells Fargo Securities, LLC are involved in the arrangement.

Insights

Financial Analyst

Fidelity National Financial's extension and amendment of its $800 million senior unsecured revolving credit facility signals a strategic move to secure long-term financing under potentially more favorable terms. The reduction in pricing, now set to a margin over the Secured Overnight Financing Rate (SOFR), indicates improved creditworthiness or market conditions that allow for cheaper borrowing costs. The applicable margin adjustment based on senior debt ratings implies a direct correlation between the company's credit rating and its cost of capital.

The increase in the total debt to total capitalization ratio from 35% to 37.5% suggests a modest uptick in leverage, which could be indicative of a strategy to capitalize on low-interest rates to fund growth initiatives or refinance existing debt. However, stakeholders should monitor this ratio as it can also imply increased financial risk if not managed properly. The unchanged financial covenants, aside from the net worth test date amendment, provide stability and predictability for investors.

Market Research Analyst

The extension of Fidelity National Financial's credit facility to 2029 provides a stable liquidity outlook, which can be reassuring for investors, especially in volatile market conditions. The unchanged commitment amount of $800 million, despite the lower pricing, reflects confidence from the lending institutions in Fidelity's financial stability and growth prospects.

The involvement of major financial institutions such as Bank of America Securities and J.P. Morgan Chase as joint lead arrangers could be perceived as an endorsement of Fidelity's creditworthiness. This could potentially have a positive impact on investor sentiment and the company's stock market performance as it reflects a level of institutional trust in the company's financial health.

Economist

The decision to lock in the credit facility's terms until 2029 suggests anticipation of future interest rate fluctuations. With the pricing tied to SOFR, which is a benchmark rate that reflects the cost of borrowing cash overnight collateralized by Treasury securities, Fidelity National Financial is aligning its borrowing costs with a broad measure of the cost of borrowing. This could be seen as a hedge against potential rate hikes, especially in an environment where interest rates are expected to rise.

Moreover, the adjustment of the net worth test date to September 30, 2023, may be a strategic financial move. It allows the company to reassess its financial position ahead of potential economic shifts, which is a prudent measure for maintaining fiscal health and meeting its obligations under the credit facility.

JACKSONVILLE, Fla., Feb. 15, 2024 /PRNewswire/ -- Fidelity National Financial, Inc. (NYSE: FNF) (FNF or the Company) today announced the amendment and extension of its existing $800 million senior unsecured revolving credit facility (the Credit Facility).

The maturity date of the Credit Facility has been extended from October 29, 2025 to February 16, 2029 and total commitments remain $800 million. Pricing has decreased to an applicable margin of between 90.0 basis points to 147.5 basis points over the Secured Overnight Financing Rate (SOFR) depending on the senior debt ratings of FNF.  At the current Moody's and Standard & Poor's senior debt ratings of Baa2/BBB, respectively, the applicable margin is 110 basis points and all-in pricing is 125 basis points.  The total debt to total capitalization ratio will increase from 35% to 37.5% and the net worth test date was amended to September 30, 2023. All other financial covenants remain essentially the same.

Bank of America Securities, Inc., J.P. Morgan Chase Bank, N.A., U.S. Bank National Association and Wells Fargo Securities, LLC acted as joint lead arrangers and joint book managers of the Credit Facility.

About Fidelity National Financial, Inc.
Fidelity National Financial, Inc. (NYSE: FNF) is a leading provider of title insurance and transaction services to the real estate and mortgage industries, and a leading provider of insurance solutions serving retail annuity and life customers and institutional clients through its majority owned subsidiary F&G Annuities & Life, Inc. (NYSE: FG). FNF is the nation's largest title insurance company through its title insurance underwriters - Fidelity National Title, Chicago Title, Commonwealth Land Title, Alamo Title and National Title of New York - that collectively issue more title insurance policies than any other title company in the United States. More information about FNF can be found at www.fnf.com.

Forward-Looking Statements and Risk Factors
This press release contains forward-looking statements that involve a number of risks and uncertainties. Statements that are not historical facts, including statements regarding our expectations, hopes, intentions or strategies regarding the future 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 financial and operating results and are not statements of fact, actual results may differ materially from those projected. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. The risks and uncertainties which forward-looking statements are subject to include, but are not limited to: changes in general economic, business, political crisis, war and COVID-19 conditions, including ongoing geopolitical conflicts; weakness or adverse changes in the level of real estate activity, which may be caused by, among other things, high or increasing interest rates, a limited supply of mortgage funding or a weak U.S. economy; our potential inability to find suitable acquisition candidates; our dependence on distributions from our title insurance underwriters as a main source of cash flow; significant competition that F&G and our operating subsidiaries face; compliance with extensive government regulation of our operating subsidiaries; and other risks detailed in the "Statement Regarding Forward-Looking Information," "Risk Factors" and other sections of FNF's Form 10-K and other filings with the Securities and Exchange Commission.

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SOURCE Fidelity National Financial, Inc.

FAQ

What is the ticker symbol for Fidelity National Financial, Inc.?

The ticker symbol for Fidelity National Financial, Inc. is FNF.

What is the total commitment of the amended credit facility?

The total commitment of the amended credit facility remains $800 million.

Which banks acted as joint lead arrangers and book managers of the Credit Facility?

Bank of America Securities, J.P. Morgan Chase Bank, N.A., U.S. Bank National Association, and Wells Fargo Securities, LLC acted as joint lead arrangers and joint book managers of the Credit Facility.

What is the new maturity date of the Credit Facility?

The maturity date of the Credit Facility has been extended from October 29, 2025, to February 16, 2029.

What is the applicable margin over the SOFR based on senior debt ratings of FNF?

The applicable margin over the Secured Overnight Financing Rate (SOFR) ranges from 90.0 basis points to 147.5 basis points, depending on the senior debt ratings of FNF.