Fitch Rates Fidelity National Title Group Affirms Fidelity National Financial

October 13, 2005

CHICAGO -- Fitch Ratings assigned a 'BBB-' senior debt rating to the $300 million bank line of credit for Fidelity National Title Group, Inc. (FNT). In addition, Fitch affirmed the 'BBB-' senior debt rating of Fidelity National Financial, Inc. (FNF) as the company replaced its $700 million bank line with a $250 million facility. All ratings have a Stable Rating Outlook.

FNT expects to draw $150 million of the $300 million bank debt for a dividend to FNF. FNF has previously announced that FNT will issue $500 million in intercompany notes that would effectively push down FNF's outstanding debt to FNT, and proforma debt-to-total capital as of June 30, 2005 would be 18% and earnings' coverage of interest expense would be approximately 18 times (x). Going forward, Fitch believes ratings could be influenced by acquisitions at FNF and increased financial leverage.

The title insurance operations represent the largest business for FNF at approximately 70% of total revenue. Title operations have national scope and industry leading market share at approximately 30% at year-end 2004. The company also has leading market share in the four states that produce the highest title insurance revenue, California, Florida, Texas, and New York. FNT has historically shown better than industry average profitability, which is both a product of strong market share and attention to expense control. The company's expenses as a percentage of premiums are the best among national title insurers.

FNF's other subsidiary, Fidelity Information Services, Inc. (FIS) provides technology solutions, processing services, and information services to the financial services and real estate industries. Favorable considerations in the FIS rating included the company's leading market share in core processing systems to large banks, good retention over a diversified base of customers, and expectations for strong cash flow generation.

The following ratings are affirmed by Fitch with a Stable Outlook:

Fidelity National Financial Inc.

  • Long-term issuer at 'BBB-'.

Fitch assigns the following ratings with a Stable Outlook:

Fidelity National Financial Inc.

  • $250 million senior bank facility 'BBB-'.

Fidelity National Title Group, Inc.

  • Long-term issuer 'BBB-';
  • $300 million senior bank facility 'BBB-'.

The following are rated by Fitch with a Stable Outlook:

Fidelity National Information Services, Inc.

  • Senior Secured Credit Facility No Action 'BB-'.

Fidelity National Title Ins. Co.

Ticor Title Ins. Co. of FL

Alamo Title Insurance Co. of TX

Nations Title Insurance of NY

Chicago Title Ins. Co.

Chicago Title Ins. Co. of OR

Security Union Title Ins. Co.

Ticor Title Ins. Co.

National Title Ins. Co. of NY

  • Insurer financial strength 'A-'.

Source: Fitch Ratings


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