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S&P Announces: Fidelity National Financial Inc., Units Ratings Placed on Watch Negative

December 9, 2004

NEW YORK--(BUSINESS WIRE) -- On Dec. 09, 2004, Standard & Poor's Ratings Services placed its 'BBB' counterparty credit and senior debt ratings on Fidelity National Financial Inc. (FNF), on CreditWatch with negative implications.

At the same time, Standard & Poor's placed its 'A' counterparty credit rating on FNF's wholly owned units, the Fidelity National Title Insurance Cos. Group (Fidelity National; see ratings list) on CreditWatch with negative implications.

The CreditWatch actions are the result of FNF's Dec. 8, 2004, announcement that it intends to recapitalize its subsidiary, Fidelity National Information Services Inc. (FIS) with up to $2.8 billion in senior secured credit facilities and sell a 25% equity stake in FIS to a group of financial investors. FIS is expected to repay its existing credit facility and distribute up to $2.7 billion to its parent company FNF. The recapitalization transaction is expected to close in the first quarter of 2005. FNF is expected to distribute about $1.8 billion to its stockholders via a special cash dividend and use the remaining proceeds to repay FNF bank debt and for other general purposes.

Upon consummation of the recapitalization plans in the first quarter of 2005, Standard & Poor's estimates that consolidated pro forma debt-to-total capitalization of approximately 52% will be significantly in excess of current levels and not supportive of the current senior debt and financial strength ratings. As of Sept. 30, 2004, FNF's debt-to-total capital and GAAP interest coverage measured 18% and 31x, respectively. Though Standard & Poor's estimates that post-transaction FNF will have sufficient cash flow to meet expected fixed-charge and interest debt service obligations, all related ratings might be lowered by one to three notches upon the consummation of the company's announced recapitalization plans.

Offsetting Standard & Poor's concerns is the company's stated intention that it will not be providing a guarantee of FIS' senior credit facilities, which might serve to reduce the ratings impact on the title insurance operating entities. Furthermore, Standard & Poor's recognizes FNF's competitive position as the market leader in title and bank processing with approximately 32% and 50% market shares, respectively.

Ratings List To From
Fidelity National Financial Inc.
 Counterparty credit rating          
 Senior debt rating
BBB/Watch Neg/-- BBB/Positive/--
Alamo Title Insurance Co.
Chicago Title Insurance Co.
Chicago Title Insurance Co. of OR
Security Union Title Insurance Co.
Ticor Title Insurance Co.
Fidelity National Title Insurance Co.
BBB/Watch Neg    BBB
Fidelity National Title Insurance Co. of New York
 Counterparty credit rating           
 A/Watch Neg/-- A/Positive/--
Financial strength rating

 A/Watch Neg      A/Positive


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

Source Standard & Poor's



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