Fitch affirms First Data ratings

Fitch Ratings said it has affirmed First Data Corp.'s F1 short-term rating following the company's completed acquisition of Concord EFS. The rating applies to First Data's $1.5 billion commercial paper program and $300 million extendable commercial notes program.

Fitch said the rating continues to reflect First Data's leading position in third-party processing of credit cards, merchant transactions and payment services, allowing the company to maintain strong cash flow and a conservative financial profile.

Also considered are increased regulation and state investigations into First Data's compliance with certain rules and regulations established by the Federal Bank Secrecy Act and USA Patriot Act, strong competition for the payment services segment (Western Union) from stronger and better capitalized international banks as well as smaller, geographically concentrated niche players, the potential customer consolidation, and competitive pricing pressures in the credit card and transaction processing industries.

Fitch said First Data will need to retain its larger and higher volume customers to maintain its current economies of scale.

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