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Moody's affirms Fiserv, places First Data under review for upgrade

Moody's has affirmed Fiserv Inc.'s senior unsecured rating of Baa2 following its planned acquisition of First Data Corp. for about $22 billion in an all-stock transaction.

The rating outlook is stable, which reflects Moody's view that following the completion of the acquisition, Fiserv will prioritize decreasing leverage back to historical levels while tempering share repurchase as well as mergers and acquisitions spending.

At the same time, Moody's placed First Data's Ba3 corporate family rating and Ba2 senior secured credit facilities under review for upgrade.

The rating agency is of the view that the joint business will build a stronger business profile than that of stand-alone Fiserv and that the combination will considerably amplify Fiserv's scale. It will also offer Fiserv the distribution reach to provide digital payment solutions that cover the entire payment ecosystem including banks and merchants.