Fitch upgrades Fidelity National Information, rates note BB+

Fitch Ratings said it upgraded Fidelity National Information Services Inc.'s issuer default rating and senior secured facilities to BB+ from BB- and assigned a BB+ rating to the company's $200 million 4¾% senior unsecured notes due 2008.

The outlook is stable.

Fitch said it expects to rate the company's proposed $3.1 billion senior unsecured five-year credit facilities BB+. The company plans to use the proceeds to refinance its existing $3.2 billion senior secured credit facilities.

The ratings recognize 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, the agency said. The ratings also recognize the benefits realized by the company from its acquisition of Certegy Inc. in early 2006.

The agency said concerns include the company's history of debt-financed acquisitions, well-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 believes that potential acquisitions also remain a risk but expects the company will have the flexibility and capacity to manage its leverage accordingly.

Total debt to operating EBITDA was 2.7x on an annualized basis as of June 30.

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