Moody's may cut FIS

Moody's Investors Service said it placed the Ba1 corporate family rating, probability of default rating of FIS (formerly Fidelity National Information Services, Inc.) on review for possible downgrade, along with its $2.1 billion first-lien senior secured term loan A, rated Ba1 (LGD 3, 47%), $900 million first-lien senior revolving credit facility, rated Ba1 (LGD 3, 47%), $500 million senior secured term loan C, rated Ba1 (LGD 3, 47%) and $145 million receivables-backed revolver, rated Ba1 (LGD 3, 47%). Metavante Corp.'s $800 million senior secured term loan B due 2014, rated Ba1 (LGD 3, 47%) also is on downgrade review.

The review follows news that the company will repurchase up to $2.5 billion of its common stock. Its board of directors has authorized a leveraged recapitalization plan in which FIS will repurchase up to $2.5 billion of its common stock at a price range of $29.00 to $31.00 per share, Moody's said.

To finance the stock buyback, the company plans to incur about $2.5 billion of incremental debt while seeking to amend and refinance its existing credit facilities, the agency said.

The company's pro forma leverage will be more than 4x upon completion of the leveraged recap, not including the full benefit of anticipated cost savings from its recent acquisition of Metavante, the agency said.

The review will focus on the company's final capital structure upon completion of the refinancing and share repurchase, the extent to which leverage is likely to decline post closing, management's future financial policies and its projected performance in light of the current economic environment, Moody's said.

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