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Industry News

Fidelity National Financial Inc. And Subsidiaries Ratings Removed From CreditWatch And Lowered

February 9, 2005

NEW YORK (Standard & Poor's) -- Standard & Poor's Ratings Services said today that it lowered its counterparty credit rating on Fidelity National Financial Inc. (NYSE:FNF) to 'BBB-' from 'BBB' and removed it from CreditWatch, where it had been placed on Dec. 9, 2004.

Standard & Poor's also said that it lowered its counterparty credit and financial strength ratings on the seven title underwriting entities that constitute Fidelity National Title Insurance Cos. Group (Fidelity National) to 'A-' from 'A' and removed them from CreditWatch.

The outlook on all these companies is stable.

These rating actions follow Standard & Poor's assignment earlier today of its 'BB' rating to the $3.2 billion senior secured credit facilities of FNF's 75%-owned subsidiary, Fidelity National Information Services Inc. (FIS). "We believe that as long as FNF retains a majority ownership stake in FIS, FNF might deem it necessary to provide implicit support to FIS--whether managerial or financial," said Standard & Poor's credit analyst Donovan Fraser. "Although FIS's senior credit facilities are not guaranteed by FNF, the potential exists for distraction of FNF's senior management given the company's majority ownership interest in FIS. In addition, without FIS, FNF will lose a significant source of earnings diversity and will look to service the majority of its debt and holding-company obligations from its title insurance operations."

Standard & Poor's expects that on a stand-alone basis, FNF will maintain financial leverage at less than 25% in 2005 and that its GAAP interest coverage will exceed 20x. Standard & Poor's further expects Fidelity National's top line to decrease by about 20% in 2005 because of lower projected mortgage-origination levels. Earnings are expected to fall proportionately, as the company is expected to maintain full-year title ROR of 15% or better, which is consistent with 2004 levels, because of increased efficiencies as FNF is expected to proactively manage staffing levels throughout the interest rate cycle.

Complete ratings information is available to subscribers of RatingsDirect, Standard & Poor's Web-based credit analysis system, at www.ratingsdirect.com. All ratings affected by this rating action can be found on Standard & Poor's public Web site at www.standardandpoors.com; under Credit Ratings in the left navigation bar, select Find a Rating, then Credit Ratings Search.EW YORK (Standard & Poor's) Feb. 8, 2005--Standard & Poor's Ratings Services said today that it lowered its counterparty credit rating on Fidelity National Financial Inc. (NYSE:FNF) to 'BBB-' from 'BBB' and removed it from CreditWatch, where it had been placed on Dec. 9, 2004. Standard & Poor's also said that it lowered its counterparty credit and financial strength ratings on the seven title underwriting entities that constitute Fidelity National Title Insurance Cos. Group (Fidelity National) to 'A-' from 'A' and removed them from CreditWatch.

The outlook on all these companies is stable.

These rating actions follow Standard & Poor's assignment earlier today of its 'BB' rating to the $3.2 billion senior secured credit facilities of FNF's 75%-owned subsidiary, Fidelity National Information Services Inc. (FIS). "We believe that as long as FNF retains a majority ownership stake in FIS, FNF might deem it necessary to provide implicit support to FIS--whether managerial or financial," said Standard & Poor's credit analyst Donovan Fraser. "Although FIS's senior credit facilities are not guaranteed by FNF, the potential exists for distraction of FNF's senior management given the company's majority ownership interest in FIS. In addition, without FIS, FNF will lose a significant source of earnings diversity and will look to service the majority of its debt and holding-company obligations from its title insurance operations."

Standard & Poor's expects that on a stand-alone basis, FNF will maintain financial leverage at less than 25% in 2005 and that its GAAP interest coverage will exceed 20x. Standard & Poor's further expects Fidelity National's top line to decrease by about 20% in 2005 because of lower projected mortgage-origination levels. Earnings are expected to fall proportionately, as the company is expected to maintain full-year title ROR of 15% or better, which is consistent with 2004 levels, because of increased efficiencies as FNF is expected to proactively manage staffing levels throughout the interest rate cycle.

Source: Standard & Poor's



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