Historic Private Placement, Among the Largest in History,
Transforms Capital Structure of Company
Additional $5.7 Billion of Term Loans are Refinanced,
Creating Additional Annual Savings
$440 Million in Total Annual Interest Savings Fuels Product Development and
Ongoing Efforts to Drive Client Business Growth
ATLANTA, July 15, 2014 – One of the largest private placements in U.S. business history officially closed on Friday, July 11, netting First Data Holdings Inc., the parent company of First Data Corporation, the proceeds from the sale of $3.5 billion of its common equity from the private placement announced four weeks ago on June 19. Building on $375 million in annual interest savings from that transaction, First Data today announced its total annualized interest savings will grow to approximately $440 million following the completion of additional steps the company has taken to strengthen its capital structure.
“The closing of our historic private placement of $3.5 billion represents a major vote of confidence in our client-focused strategy from the investment community,” said Chairman and CEO Frank Bisignano. “This investment unlocks interest savings to help us accelerate our transformation and strengthen our commitment to help our clients thrive, from the world’s largest financial institutions to the smallest merchants who use our products and services to grow their businesses,” Bisignano added.
The private placement will result in interest savings of $375 million for the company to invest in innovation on behalf of its clients. The company expects total interest savings to grow significantly larger following the completion of two additional actions. These actions include re-pricing of $5.7 billion in term loans and securing additional term loans to further pay down the outstanding balance of the Senior PIK Note at First Data Holdings Inc. The private placement plus the proceeds from the additional term loans will allow First Data to reduce the Senior PIK principal from approximately $1.5 billion to $216 million. The cumulative benefit of these actions, once completed, will be annualized interest savings of approximately $440 million.
To help clients grow their businesses, First Data recently launched new value-added commerce solutions, such as the Clover™ Station, Perka™ and InsighticsSM. Clover™ Station is First Data’s new cloud-based business control and payment platform that puts a powerful business application marketplace at the merchant’s fingertips. Perka™ is the company’s mobile marketing and consumer loyalty platform that helps small to medium-sized merchants engage their customers with location-based smartphone apps. InsighticsSM creates business intelligence analytics for merchants to drive additional revenue.
All of these achievements were built on top of First Data’s trophy asset, its proprietary critical infrastructure that links merchants and issuers, at scale, around the world.
About First Data
Around the world, every second of every day, First Data makes payment transactions secure, fast and easy for merchants, financial institutions and their customers. First Data leverages its vast product portfolio and expertise to drive client revenue and profitability. Whether the choice of payment is by debit or credit card, gift card, check or mobile phone, online or at the checkout counter, First Data takes every opportunity to go beyond the transaction. More information about the company is available on FirstData.com as well as on Twitter, LinkedIn, Facebook and YouTube.
This press release includes certain disclosures which contain “forward-looking statements.” You can identify forward-looking statements because they contain words such as “believes” and “expects.” Forward-looking statements are based on the Company’s current expectations and assumptions. Because forward-looking statements relate to the future, they are subject to inherent uncertainties, risks and changes in circumstances that may differ materially from those contemplated by the forward-looking statements, which are neither statements of historical fact nor guarantees or assurances of future performance. Important factors that could cause actual results to differ materially from those in the forward-looking statements are set forth in our Annual Report on Form 10-K for the fiscal year ended December 31, 2013 under the caption “Risk Factors.”
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