S&P cuts Fidelity National

Standard & Poor's said it lowered its corporate credit rating on Fidelity National Information Services Inc. to BB from BB+ and removed it from CreditWatch, where it was placed with negative implications in May.

The agency also said it assigned a BBB- with a recovery rating of 1, indicating a 90% to 100% recovery in the event of default, to its proposed extended senior secured term loan A2 of up to $2 billion, the proposed new $1.4 billion senior secured term loan B and the up to $933 million extending revolving credit facility.

The agency also said it upgraded the ratings on the existing and non-extending $397 million term loan A1 and $103 million revolver to BBB- from BB+ and revised the recovery rating to 1 from 3 and downgraded the ratings on the existing $145 million accounts receivable-backed revolving credit facility issued by a subsidiary of Fidelity National to BBB- from BBB. The recovery rating remains 1, indicating expectations for 90% to 100% recovery in the event of a default.

The outlook is stable.

The agency said it expects proceeds to be used to repay the existing $800 million term loan B at Metavante Corp. and for share repurchases.

The downgrade follows the company's decision to pursue a leveraged recapitalization, issuing $2.6 billion of incremental debt to repurchase its common stock through a Dutch auction tender offer, S&P said.

While high for the rating, the company's leveraged financial profile is partly offset by its satisfactory business profile and its capacity to reduce debt, if the company chooses, from its strong free cash flow generation, the agency said.

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