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Fitch Affirms Ratings of Fidelity National Financial & Operating Subsidiaries

September 16, 2005

CHICAGO--(BUSINESS WIRE) -- Fitch affirmed the 'BB-' rating on the senior secured credit facility of Fidelity National Information Services (FIS) after today's announcement of the proposed merger between FIS and Certegy, Inc. (CEY). In addition, Fitch affirmed the 'A-' insurer financial strength ratings of the title insurance underwriting subsidiaries of Fidelity National Financial, Inc. (FNF) and the 'BBB-' long-term issuer rating of FNF. All ratings have a Stable Rating Outlook.

CEY is a provider of card issuer services to financial institutions, principally community banks and credit unions. CEY appears to share a common customer base with FIS, who provides technology solutions, processing services, and information services to the financial services and real estate industries. FIS would be the surviving entity from the proposed merger through a stock-for-stock merger, where CEY shareholders would receive a share of FIS stock for every 0.6396 shares of CEY.

The combined FIS/CEY entity would produce an estimated $4 billion in annual revenue. The long-term nature of the servicing contracts produces a very stable revenue stream, comparing favorably to the more cyclical revenue produced on the title insurance side. After the proposed merger, FIS' share of consolidated annual FNF revenue would be approximately 35%, up from 28% during the first half of 2005.

Financial leverage at FIS would decline to an estimated 55% after the merger compared with the current 81%, and consequently, consolidated debt-to-total capital at FNF would fall below 40%. Balanced against the improvement in financial leverage are integration risks that are present in any merger, as well as considerable goodwill and other intangible assets that continue to create negative tangible equity at FIS. The title insurance business will be relatively unaffected by the proposed merger, other than the overall reduction in leverage at the consolidated enterprise.

Fitch expects further discussions with FIS' management team regarding detailed business plans for the combined FIS/CEY entity. Future favorable rating actions on the FIS debt might occur following successful integration and seasoning of the proposed merger.

Fidelity National Title Insurance Co.

Ticor Title Insurance Co. of FL

Alamo Title Insurance Co. of TX

Nations Title Insurance of NY

Chicago Title Insurance Co.

Chicago Title Insurance Co. of OR

Security Union Title Insurance Co.

Ticor Title Insurance Co.

National Title Insurance Co. of NY

Insurer financial strength affirmed at 'A-'/Stable Outlook.

Fidelity National Financial Inc.

  • Long-term issuer affirmed at 'BBB-'/Stable Outlook

Fidelity National Information Services, Inc.

  • Senior Secured Credit Facility affirmed at 'BB-'/Stable Outlook.

Source: FNF



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