Fitch: Western Union notes BBB+

Fitch Ratings said it assigned a BBB+ rating to the Western Union Co.'s senior unsecured notes due 2022.

The proceeds will be used for general corporate purposes, including the funding of a joint settlement agreement, Fitch explained.

Western Union's long-term issuer default rating is BBB+ and the outlook is stable.

In January, Western Union reached an agreement with the U.S. Department of Justice, the Federal Trade Commission and the U.S. Treasury Department Financial Crimes Enforcement Network, Fitch said.

The agreement relates to alleged compliance issues that primarily occurred over the 2004 to 2012 timeframe, the agency said.

Further oversight by an independent compliance auditor will be in place for a three-year period. The total cost of the settlement is about $586 million, the agency said.

Fitch said it believes potential ongoing risks associated with fraud and related issues, while still present, are mitigated by stronger controls currently in place and a significant investment in employees with regulatory and law enforcement expertise.

Western Union's compliance spending has increased from about $60 million in 2011 to an annual rate of about $200 million, the agency added.

The ratings reflect the company’s strong competitive position and investment in new platforms and expanding markets, Fitch said.

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