Fitch Places Fidelity National Financial on Rating Watch Negative

December 9, 2004

CHICAGO--(BUSINESS WIRE) -- Fitch Ratings is placing 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 on Rating Watch Negative.

The Rating Watch Negative follows FNF's announced leveraged recapitalization of its subsidiary, Fidelity National Information Services (FIS), targeted to close in the first quarter of 2005. The recapitalization plan anticipates FIS borrowing $2.8 billion on a secured basis from a consortium of lenders and distributing nearly all the proceeds to FNF. Consolidated leverage at FNF is expected to be in excess of 50% of total capital.

FNF will use the approximately $2.7 billion in cash from FIS to declare a special dividend to stockholders, amounting to roughly $1.8 billion, pay down existing bank debt, and potentially repurchase FNF stock. In addition to the cash proceeds from the FIS distribution, FNF announced the signing of a letter of intent to sell a 25% interest in FIS to Thomas H. Lee Partners and Texas Pacific Group. The sale of minority interest in FIS is expected to result in a gain of approximately $375 million for FNF.

These announced plans allow FNF to maintain controlling interest in FIS, as well as establish a valuation of FIS.

Fitch's resolution of the Negative Rating Watch on FNF will focus on the ultimate capital structure of FNF both from a consolidated and stand-alone perspective, as well as debt service capability. The potential amount of financial leverage resulting from these transactions may pull down the financial strength ratings of the title underwriting subsidiaries and potentially widen the gap between the financial strength ratings and the long-term issuer rating at FNF. Fitch will continue to monitor the situation and discuss plans with FNF's management as various steps are reached and transactions are formalized.

Fidelity National Title Insurance Co. Fidelity National Title Insurance Co. of New York Alamo Title Insurance Co. of Texas Nations Title Insurance of New York Chicago Title Ins. Co. Chicago Title Ins. Co. of Oregon Security Union Title Insurance Co.

Ticor Title Insurance Co. -- Insurer financial strength rated 'A' with a Negative Watch.

Fidelity National Financial Inc. -- Long-term issuer rated 'BBB' with a Negative Watch.

Source: Fitch Ratings


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