Fidelity National Information Services Inc.

The stable outlook reflects our expectation that large expense reduction will offset revenue contraction over the coming year, allowing FIS to increase EBITDA sequentially from a mid-year trough and generate substantial free cash flows to repay debt. We could lower the rating if FIS does not show steady debt reduction over the coming year, such that we believe leverage will remain above 3x. This could occur if impact from the pandemic is worse than we anticipated, materially weakening the company's financial performance. This could also occur if FIS deploys significant cash for shareholder returns or acquisitions rather than debt repayment. Although unlikely over the next year, we could raise the rating if FIS generates consistent organic revenue and EBITDA growth,

...Fidelity National Information Services Inc. (FIS) has a large global scale with about a 30% merchant portfolio and resilient bank clients. The Worldpay acquisition closed in July 2019 gave FIS a strong position in merchant payment processing in both the U.S. and international ecommerce markets. The company's expansive scope of banking technology solutions and high proportion of mission-critical and recurring services provided to long-term bank clients have helped secure a solid revenue base during the COVID-19 outbreak. The added merchant portfolio and its robust ecommerce platform will enable the company to gain share as the global economy recovers. Shifts toward digital commerce and digital banking are at the forefront of the industry. Although the environment remains highly competitive, global scale is a critical competitive advantage and a barrier to entry for incumbents to withstand pricing pressure, offset merchant attrition and continue to innovate and maintain profitability. Accelerated...

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