Moody's: Synovus spinoff may hurt credit

Moody's Investors Service may cut its credit rating on Synovus Financial Corp. because of the bank's plan to spin off its stake in an electronic payments processor, the credit-rating agency said.

The Columbus, Ga.-based bank plans to spin off its 81 percent stake in TSYS to Synovus shareholders.

Moody's said it is concerned that by jettisoning a good source of profit, Synovus Financial may become more financially vulnerable.

Moody's said it is worried about Synovus' overexposure to real estate development and construction loans, which will become an even more concentrated portion of the company's portfolio after spinning off TSYS.

Chief Executive Richard E. Anthony said splitting the bank and the payments processor will allow each to flourish. TSYS is bound by certain restraints as a banking subsidiary, so spinning it off will remove those shackles. Meanwhile, Synovus will be able to focus exclusively on becoming the South's premier regional bank.

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(The Associated Press)

Synovus spinning off TSYS

Synovus' Columbus headquarters. (Dave Bender)

Electronic payment processor TSYS (NYSE:TSS) said Thursday it will spin-off from parent Synovus Financial (NYSE:SNV) Corp. to become an independent company.

Financial services company Synovus, which owns an 81 percent stake in the company, will distribute all of its shares of TSYS common stock to Synovus shareholders.

Synovus CEO Richard E. Anthony, in a statement to stockholders said:

"This change presents an exciting opportunity for each company to focus exclusively on its core business, which we believe will lead to increased shareholder value."

Under terms of the agreement, TSYS will pay a one-time cash dividend of $600 million to all TSYS shareholders, including Synovus. The company plans to fund the dividend through a combination of cash on hand and a revolving credit facility. Based on the number of TSYS shares outstanding as of Sept. 30, TSYS expects its shareholders to receive a cash dividend of about $3.04 per share.

The transaction is expected to be completed by the end of 2007, subject to certain conditions, including the approval of the Georgia Department of Banking and Finance.

(With The Associated Press)

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Columbus: Synovus weighing spinning off TSYS

The Columbus-based bank-holding firm which owns almost over 80-percent of TSYS, made the statement on Tuesday as part of their second-quarter earnings report.

Both companies have formed board-level committees to consider the step, and expect to make their decision by the third quarter, according to a report in the Ledger-Enquirer newspaper.

TSYS has over 6,700 employees in their American, Latin American, European and Asian operations.