First Data Debt Downgraded to Junk

WALL STREET – Fitch Ratings downgraded First Data Corp.’s long-term debt to junk status, citing expectations the company’s debt load will be increased substantially after the pending $27 billion buyout of the payments giant by Kohlberg Kravis Roberts & Co. Fitch said it had cut its issuer default rating to B+ (the fourth-highest “junk” rating) from investment grade BBB to reflect First Data's "substantially higher leveraged and debt requirements.” The rating downgrade came as bankers yesterday began to sell an initial $5 million in loans. Separately, First Data announced a massive consolidation that will combine 12 call centers into just three, and its command centers from seven to two. The company would not say how many employees would be laid off as part of the $150 million cost-saving plan.