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S&P ups MoneyGram; loan at BB-
Standard & Poor's said that it raised the long-term counterparty credit rating on MoneyGram International Inc. to BB- from B+.
The outlook is stable.
S&P assigned a BB- issue rating to MoneyGram's announced $540 million senior secured credit facility, consisting of a $390 million 6.5-year term loan B and a $150 million five-year revolver. The senior credit facilities will be issued by MoneyGram Payment Systems Worldwide Inc.
The rating action reflects the reduced leverage and extended debt maturity profile that are expected as a result of MoneyGram's announced recapitalization and refinancing, the agency said.
The ratings on MoneyGram are limited by the company's lack of business diversification, relatively high agent concentration in its Global Funds Transfer segment and exposure to regulatory risk.
At year-end 2010, MoneyGram's reported debt-to-adjusted EBITDA ratio was a high 6.4 times.
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