FIS establishes European Commercial Paper Program, to use borrowings to finance Worldpay deal

Maria Nikolova

FIS plans to use $2.9 billion in borrowings under the ECP and USCP programs, together with the proceeds from a recent bond offering, to finance the Worldpay merger.

Financial services technology expert FIS (NYSE:FIS) has announced that it has completed an amendment of its existing Revolving Credit Facility that increases its borrowing capacity under the unsecured revolving facility from $4 billion to $5.5 billion with the expiration of the agreement remaining September 21, 2023. Consistent with the increase in its Revolving Credit Facility, FIS has increased the capacity under its existing U.S. Commercial Paper (USCP) program to $5.5 billion.

Further, FIS has set up a new European Commercial Paper (ECP) program under which it may issue, on a private placement basis, senior unsecured commercial paper notes up to a maximum aggregate amount outstanding at any time of $4.7 billion. Under the ECP program, FIS may issue notes from time to time, with maturities that vary, but do not exceed 183 days from the date of issue.

FIS plans to use approximately $2.9 billion in borrowings under the ECP and USCP programs, together with the proceeds from its recently completed $8.2 billion multi-currency bond offering, to finance the cash portion of the consideration for its pending merger with payments technology company Worldpay Inc (NYSE:WP), the repayment of outstanding Worldpay debt and other costs and expenses of the merger.

Based on the recent bond offering and new ECP program, FIS expects the weighted average interest rate on the permanent financing of the $11.1 billion used for the Worldpay transaction to be approximately 1.5%.

Worldpay delisted from the London Stock Exchange on May 20, 2019. The move was a part of Worldpay’s steps toward completing its merger with FIS. As part of the FIS Transaction, Worldpay has agreed to use its reasonable best efforts to take, or cause to be taken, all actions reasonably necessary to cause the Delisting before completion of the FIS Transaction. The FIS Transaction is subject to a number of conditions, including receipt of required shareholder and regulatory approvals.

In its first quarter 2019 report, Worldpay provided an update on how its deal with FIS is progressing. Based on the Company’s substantial progress toward completing post-merger integration, Worldpay now expects to achieve $250 million in annualized cost synergies by year-end 2019, up from its previous expectation to achieve $200 million in annualized cost synergies by year-end 2020. In addition, Worldpay is increasing its in-year 2019 cost synergies forecast to $180-$190 million from $130-$140 million.

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