Metavante Technologies' debtholders stand to benefit from a substantial paydown and price bump on their positions following the company's acquisition by Fidelity National Information Services.
The transaction, which is expected to close in the third quarter, will involve a pro-rata $400 million paydown of Metavante's ouststanding $1.7 billion in loans, according to Mary Waggoner, senior v.p. of investor relations at FIS. An $800 million portion will roll over and remain in the Metavante name with pricing of LIBOR plus 3.25%. The remaining $500 million will be exchanged as an add-on to FIS's existing debt and will have a coupon of LIBOR plus 4.25%. A call to Kirk Larsen, Metavante treasurer, was not returned. The bank on both deals is JPMorgan. FIS will also put in place a $445 million accounts receivable securitization facility.
"I view it as all good news," said one portfolio manager. "There's a paydown. We've banked on Fidelity in the past. We know that company and what they do and it's a pretty strong story." He did note that there could be some contention among lenders because the company did not add a LIBOR floor to the deal. "That's the only thing I would view as an irritant," the portfolio manager said.
