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Fidelity (FIS) Offers $2.5B Senior Notes in Four Tranches
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Fidelity National Information Services, Inc. (FIS - Free Report) recently announced the pricing of $2.5 billion of senior notes in four tranches. Subject to fulfillment of customary closing conditions, the notes offering is anticipated to be completed on Jul 13, 2022.
Two tranches of notes valued at $750 million each bear an interest rate of 4.500% and 5.100%, respectively. The same notes are set to mature in 2025 and 2032, respectively. The other two tranches of notes, valued at $500 million each, carry an interest rate of 4.700% and 5.625%, respectively, and are scheduled to mature in 2027 and 2052, respectively.
With the net proceeds from the sale of the notes, Fidelity intends to repay debts that are part of its commercial paper programs. The programs, comprising Euro-commercial paper notes and U.S. commercial paper notes, contained a short-term debt level of $2.7 billion as of Mar 31, 2022.
Post debt repayment, any leftover amount from the sale of the notes will be put to use by Fidelity to serve general corporate purposes.
The latest move highlights prudence exhibited by FIS since issuing senior notes fetches funds to the global leader in financial services technology. This, in turn, might boost the financial flexibility of FIS with the help of which the continued debt burden and its associated interest expenses can be brought down. Lower interest expenses are likely to provide some respite to Fidelity’s margins.
Fidelity had resorted to a similar process of repaying its debts last year as well. Its intensified focus on debt repayments probably kept net interest expenses on a downtrend throughout 2021 and the same continued into the first quarter of 2022 as well. The metric plunged 41.9% in the first quarter of 2022 from the year-ago quarter’s level, which remains commendable.
FIS has sufficient cash reserves and adequate cash-generation abilities in place that help service debts on a continual basis. This might sustain the stock’s creditworthiness. Net cash provided by operating activities improved 7.2% year over year in the first quarter. Fidelity also has around $2 billion for borrowing under its Revolving Credit Facility as of Mar 31, 2022.
Repayment of debts also improves the leverage ratio of a company and Fidelity is no exception to this. Its total debt-to-total capital of 29% at the first-quarter end remained below the industry’s figure of 38.8%.
Shares of Fidelity have lost 7.1% in the past three months compared with the industry’s decline of 9.7%.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Fidelity currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Business Services space are Avis Budget Group, Inc. (CAR - Free Report) , FactSet Research Systems Inc. (FDS - Free Report) and ICF International, Inc. (ICFI - Free Report) . While Huron Consulting currently flaunts a Zacks Rank #1 (Strong Buy), FTI Consulting and Automatic Data Processing carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Avis Budget outpaced estimates in each of the trailing four quarters, the average being 102.13%. The Zacks Consensus Estimate for CAR’s 2022 earnings suggests an improvement of 74.7% from the year-ago reported figure. The same for revenues suggests growth of 23.1% from the prior-year reported number. The consensus mark for CAR’s 2022 earnings has moved 2.4% north in the past 30 days.
FactSet Research’s earnings outpaced estimates in three of the trailing four quarters and missed the mark once, the average surprise being 10.92%. The Zacks Consensus Estimate for FDS’s 2022 earnings suggests an improvement of 19.8% from the year-ago reported figure. The same for revenues suggests growth of 15.2% from the prior-year tally. The consensus mark for FDS’s 2022 earnings has moved 3.2% north in the past 30 days.
The bottom line of ICF International outpaced estimates in each of the last four quarters, the average being 14.81%. The Zacks Consensus Estimate for ICFI’s 2022 earnings suggests an improvement of 11% from the year-ago reported figure. The same for revenues suggests growth of 11.1% from the year-ago tally. The consensus mark for ICFI’s 2022 earnings has moved 1.9% north in the past 30 days.
Shares of Avis Budget, FactSet Research and ICF International have declined 35.8%, 9.3% and 3.1%, respectively, in the past three months.
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Fidelity (FIS) Offers $2.5B Senior Notes in Four Tranches
Fidelity National Information Services, Inc. (FIS - Free Report) recently announced the pricing of $2.5 billion of senior notes in four tranches. Subject to fulfillment of customary closing conditions, the notes offering is anticipated to be completed on Jul 13, 2022.
Two tranches of notes valued at $750 million each bear an interest rate of 4.500% and 5.100%, respectively. The same notes are set to mature in 2025 and 2032, respectively. The other two tranches of notes, valued at $500 million each, carry an interest rate of 4.700% and 5.625%, respectively, and are scheduled to mature in 2027 and 2052, respectively.
With the net proceeds from the sale of the notes, Fidelity intends to repay debts that are part of its commercial paper programs. The programs, comprising Euro-commercial paper notes and U.S. commercial paper notes, contained a short-term debt level of $2.7 billion as of Mar 31, 2022.
Post debt repayment, any leftover amount from the sale of the notes will be put to use by Fidelity to serve general corporate purposes.
The latest move highlights prudence exhibited by FIS since issuing senior notes fetches funds to the global leader in financial services technology. This, in turn, might boost the financial flexibility of FIS with the help of which the continued debt burden and its associated interest expenses can be brought down. Lower interest expenses are likely to provide some respite to Fidelity’s margins.
Fidelity had resorted to a similar process of repaying its debts last year as well. Its intensified focus on debt repayments probably kept net interest expenses on a downtrend throughout 2021 and the same continued into the first quarter of 2022 as well. The metric plunged 41.9% in the first quarter of 2022 from the year-ago quarter’s level, which remains commendable.
FIS has sufficient cash reserves and adequate cash-generation abilities in place that help service debts on a continual basis. This might sustain the stock’s creditworthiness. Net cash provided by operating activities improved 7.2% year over year in the first quarter. Fidelity also has around $2 billion for borrowing under its Revolving Credit Facility as of Mar 31, 2022.
Repayment of debts also improves the leverage ratio of a company and Fidelity is no exception to this. Its total debt-to-total capital of 29% at the first-quarter end remained below the industry’s figure of 38.8%.
Shares of Fidelity have lost 7.1% in the past three months compared with the industry’s decline of 9.7%.
Image Source: Zacks Investment Research
Zacks Rank & Key Picks
Fidelity currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks in the Business Services space are Avis Budget Group, Inc. (CAR - Free Report) , FactSet Research Systems Inc. (FDS - Free Report) and ICF International, Inc. (ICFI - Free Report) . While Huron Consulting currently flaunts a Zacks Rank #1 (Strong Buy), FTI Consulting and Automatic Data Processing carry a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The bottom line of Avis Budget outpaced estimates in each of the trailing four quarters, the average being 102.13%. The Zacks Consensus Estimate for CAR’s 2022 earnings suggests an improvement of 74.7% from the year-ago reported figure. The same for revenues suggests growth of 23.1% from the prior-year reported number. The consensus mark for CAR’s 2022 earnings has moved 2.4% north in the past 30 days.
FactSet Research’s earnings outpaced estimates in three of the trailing four quarters and missed the mark once, the average surprise being 10.92%. The Zacks Consensus Estimate for FDS’s 2022 earnings suggests an improvement of 19.8% from the year-ago reported figure. The same for revenues suggests growth of 15.2% from the prior-year tally. The consensus mark for FDS’s 2022 earnings has moved 3.2% north in the past 30 days.
The bottom line of ICF International outpaced estimates in each of the last four quarters, the average being 14.81%. The Zacks Consensus Estimate for ICFI’s 2022 earnings suggests an improvement of 11% from the year-ago reported figure. The same for revenues suggests growth of 11.1% from the year-ago tally. The consensus mark for ICFI’s 2022 earnings has moved 1.9% north in the past 30 days.
Shares of Avis Budget, FactSet Research and ICF International have declined 35.8%, 9.3% and 3.1%, respectively, in the past three months.