Fitch puts Fidelity National Information on watch

Fitch Ratings said it placed Fidelity National Information Services Inc.'s ratings on Rating Watch negative, including its BB+ issuer default rating, BB+ $3 billion senior unsecured credit facilities and BB+ senior unsecured notes.

The Rating Watch follows the company's announced acquisition plans to acquire eFunds Corp. in a $1.8 billion all-cash transaction in order to expand its presence in banking markets in the United States and abroad. Fidelity plans to fund the purchase with a combination of cash on hand and recently secured long-term debt commitments.

The agency said the ratings for Fidelity have historically centered on the company's ability to generate strong free cash flow, its strong market position in core businesses, diversified product offering, solid client retention, counter-cyclical revenue streams and recurring revenue base from long-term processing agreements.

Credit concerns include Fidelity's history of debt-financed acquisitions, better-capitalized significant industry competitors, the ongoing consolidation of its financial institution customer base and event risk associated with two private equity firms that have a combined equity stake of approximately 15%, Fitch said.

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