Moody's downgrades Western Union view to negative

Moody's Investors Service said it revised the outlook to negative from stable on Western Union, Inc.

The agency also said it affirmed its A3 long-term rating and prime-2 short-term rating.

While cash will be used to fund the $970 million acquisition of Travelex' global payments business, Moody's said it considers Western Union's debt-to-EBITDA of mid-2x to be on the edge of the A3 rating category given the company's business profile and recent record of flat operating profit.

Any further sizable share repurchase or acquisition activity that results in debt financing would weaken the credit profile of the company, the agency said.

With the nearly $1 billion of cash outlay for the Travelex purchase, Moody's said it believes Western Union has reduced its financial flexibility given the level of financial leverage.

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