Fitch lowers Western Union

Fitch Ratings said it lowered the issuer default rating for the Western Union Co. to BBB+ from A-, along with its senior unsecured debt rating to BBB+ from A- and senior unsecured credit facility to BBB+ from A-.

The outlook is negative.

Fitch also said it affirmed Western Union's short-term issuer default rating at F2 and commercial-paper program at F2.

The downgrades reflect that the company's initial guidance for 2013 is significantly below expected 2012 results, Fitch said. Specifically, the company believes revenue may be flat to down modestly, but GAAP operating income may be down 10% to 15% as margins decline, the agency said.

The downgrades also consider that the company is planning to lower pricing for international remittance services in certain corridors beginning in the fourth quarter of 2012 in effort to regain lost market share in certain regions, the agency said.

The company also is planning to increase its investment in compliance and technology in the coming year which will increase operating expenses, Fitch added.

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