Fiserv issues new senior notes in dual offering

Today, Fiserv Inc (NYSE:FI). (NASDAQ:FISV), a global provider of financial services technology solutions, announced the completion of a public offering and issuance of senior notes totaling $1.75 billion. This financial move introduces $850 million of 4.750% senior notes due in 2030 and $900 million of 5.150% senior notes due in 2034.

The offering, closed on Monday, is underpinned by an indenture dated November 20, 2007, with U.S. Bank Trust Company, National Association serving as trustee. Two supplemental indentures, both dated today, establish the terms for the newly issued notes.

Interest on the 2030 notes is payable semi-annually on March 15 and September 15, starting March 15, 2025, with the notes maturing on March 15, 2030. The 2034 notes will pay interest semi-annually on February 12 and August 12, beginning February 12, 2025, and mature on August 12, 2034.

Fiserv reserves the right to redeem the notes before their scheduled par call dates at specified rates. If redeemed before the par call dates, the redemption price will be the greater of a calculated sum of present values or 100% of the principal amount, plus accrued interest. After the par call dates, the redemption price equals 100% of the principal amount, plus accrued interest.

In the event of a change of control triggering event, Fiserv is obliged to offer to repurchase the notes at 101% of their principal amount, plus accrued interest.

The indentures include customary events of default, where the trustee or note holders of at least 25% of the principal amount can demand immediate payment. Should Fiserv face bankruptcy, insolvency, or reorganization, all outstanding notes would become due immediately.

In other recent news, Fiserv has seen a series of positive developments. The financial services technology company reported a substantial 7% year-over-year increase in second-quarter 2024 revenue, reaching a record $5.11 billion.

This growth was largely attributed to the company's integrated financial services solutions and strong client relationships. Fiserv also reported a 31% increase in second-quarter earnings, leading to an upward revision of its full-year profit forecast.

Several analyst firms have made adjustments to their price targets for Fiserv. Tigress Financial Partners lifted its price target for Fiserv to $190, citing the company's continued growth and product innovation. Similarly, Mizuho Securities raised its price target for Fiserv to $183, citing the robustness of its Merchant Solutions business. TD Cowen increased its price target to $182, noting the company's consistent performance and successful execution of its product strategy.

Fiserv's growth trajectory is further supported by its strategic acquisitions, which broaden its product and service offerings. The company has also launched new banking features and plans to introduce additional restaurant functionality for its Clover platform.

InvestingPro Insights

Fiserv Inc.'s recent announcement of a $1.75 billion senior notes offering demonstrates the company's proactive approach to capital management. In light of this development, InvestingPro provides some key insights that may be of interest to investors monitoring the company's financial strategies. According to InvestingPro Data, Fiserv boasts a healthy market capitalization of $92.66 billion and trades at a P/E ratio of 27.75, reflecting investor confidence in its earnings potential. The company has also seen a solid revenue growth of 7.2% over the last twelve months as of Q2 2024.

InvestingPro Tips highlight that Fiserv's management has been actively buying back shares, signaling a strong belief in the company's value. Additionally, the company is trading near its 52-week high, with a price 97.15% of that peak, which may indicate a robust market sentiment. With 15 analysts revising their earnings upwards for the upcoming period and a PEG ratio of 0.59 suggesting potential for growth at a reasonable price, Fiserv appears to be a prominent player in the Financial Services industry.

For those considering a deeper dive into Fiserv's financial health and future prospects, InvestingPro offers numerous additional tips, providing a comprehensive analysis that could guide investment decisions. To explore further, visit https://www.investing.com/pro/FISV.

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