Bullish indicating open at $55-$60, IPO prices at $37
Fiserv Inc . (NYSE:FI) announced Tuesday that it has entered into a new senior unsecured multicurrency revolving credit facility with a maximum aggregate principal amount of $8.0 billion. The facility, which matures on August 12, 2030, replaces the company’s previous $6.0 billion credit agreement that was set to mature in 2027. As of Tuesday, no funds had been drawn under the new agreement.
The new credit agreement, arranged with JPMorgan Chase (NYSE:JPM) Bank, N.A. as administrative agent and a syndicate of financial institutions, allows Fiserv and certain subsidiaries to borrow, repay, and re-borrow amounts in U.S. dollars, euro, pounds sterling, and other currencies as agreed by the lenders. The facility offers variable interest rates based on currency-specific benchmarks, such as Term SOFR for U.S. dollar borrowings, plus a margin determined by Fiserv’s long-term debt rating.
According to the filing, Fiserv is required to maintain its consolidated indebtedness at no more than 3.75 times its consolidated EBITDA at the end of each fiscal quarter, subject to certain exceptions. The company will also pay a facility fee based on total commitments, regardless of usage, and fees for any letters of credit issued under the agreement. These fees also fluctuate based on Fiserv’s long-term debt rating.
The agreement includes customary covenants and events of default. If a default occurs, the administrative agent may terminate the lenders’ commitments and declare any outstanding obligations immediately due. In the event of bankruptcy proceedings involving Fiserv or its material subsidiaries, the facility would automatically terminate and all obligations would become due.
The new facility replaces Fiserv’s prior credit agreement dated June 16, 2022, which also had no outstanding borrowings as of Tuesday. The company stated that the covenants in the new agreement are substantially similar to those in the prior arrangement.
This information is based on a statement in Fiserv’s Form 8-K filed with the Securities and Exchange Commission.
In other recent news, Fiserv’s second-quarter earnings report has led to several adjustments in analyst price targets. Truist Securities lowered its price target for Fiserv to $170, citing a revised price-to-earnings multiple based on their 2026 adjusted earnings per share forecast. Mizuho (NYSE:MFG) also reduced its price target to $165, pointing to concerns about the growth of Fiserv’s Clover platform and a lowered organic growth guidance. Bernstein adjusted its target to $205, attributing the change to revenue and margin misses, partly due to challenges in Argentina. Keefe, Bruyette & Woods decreased their target to $170, highlighting a weak outlook driven by challenges in the Merchant segment and broader economic issues. Lastly, KeyBanc revised its price target to $200, noting a slowdown in growth across Fiserv’s business segments and reduced margin expansion projections. Despite these adjustments, most firms maintained positive ratings, indicating continued confidence in Fiserv’s potential. These developments reflect the impact of Fiserv’s recent earnings and operational challenges on analyst expectations.
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