Moody's may cut Fidelity National Financial to junk

Moody's Investors Service said it placed the debt ratings of Fidelity National Financial, Inc. (senior debt Baa3) on review for possible downgrade following the company's announcement that it intends to modify its corporate structure by creating a publicly traded, majority-owned title insurance holding company.

The rating agency said that the restructuring of the company would include borrowing an additional $500 million under a new bank credit facility at the new holding company for the title insurance operations, which will subordinate the creditors of the ultimate holding company.

In the same action, Moody's affirmed the insurance financial strength ratings of Fidelity National Financial's primary insurance operating subsidiaries at A3, although the outlook was changed to negative because of the rating agency's concern with Fidelity National Financial increasing its use of financial leverage in the future. Moody's also affirmed the ratings (Ba3 senior) of Fidelity National Financial's 75%-owned subsidiary Fidelity National Information Services Inc.

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