Fitch rates Western Union notes BBB+

Fitch Ratings said it assigned a BBB+ rating to the Western Union Co.'s issuance of $250 million in 2.375% senior unsecured notes due December 2015 and $500 million in 2.875% senior unsecured notes due December 2017.

Western Union has an issuer default rating of BBB+, senior unsecured notes rating of BBB+, senior unsecured credit facility rating of BBB+, short-term issuer default rating of F2 and commercial-paper rating of F2.

The proceeds will be used for the refinancing $300 million in notes due 2013, as well as stock repurchases, Fitch said.

The agency said it believes there is a significant increase in event risk due to a nearly 30% decline in the stock price following the most recent earnings release.

Fitch said it estimates that Western Union now trades at a forward enterprise value to EBITDA multiple of about 6x.

This could lead to a potential third-party leveraging event, either in the form of a leveraged buyout or an activist investor forcing a leveraged recapitalization of the company, the agency said.

Fitch noted that it believes the floating-rate notes due March 2013, the 6.5% senior unsecured notes due February 2014, the 3.65% senior unsecured notes due 2018 and the 6.2% senior unsecured notes due June 2040 contain some form of a change of control provision.

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