MoneyGram International

The stable outlook over the next 12 months indicates our expectation for EBITDA interest coverage of 2.0x-3.0x, debt to EBITDA above 5.0x, and no new compliance deficiencies. Our outlook also considers MGI's modest market position in global money transfer services, adequate liquidity, and sufficient covenant cushion. We could lower the ratings over the next 12 months if: We expect EBITDA coverage to decrease below 1.5x on a sustained basis, The covenant cushion substantially declines, Refinancing risk increases, or, Further compliance deficiencies arise. We could raise the ratings over the next 12 months if leverage declines well below 5.0x, with EBITDA interest coverage staying well above 2.0x on a sustained basis. An upgrade would also depend on no further compliance deficiencies

...MoneyGram International (MGI) faces increased competition and pricing pressure. MGI, along with Western Union and Ria (a business by Euronet International), are leaders in the fragmented global cross-border payment market. We expect the rise in fintech firms--such as Venmo, PayPal, and Zelle--to continue to challenge MGI's domestic transaction volume and pricing. The company's improved compliance program and settlement of the Deferred Prosecution Agreement (DPA) with the Department of Justice will alleviate regulatory pressure. We expect the company to have ongoing regulatory reviews, requiring robust compliance programs. In April 2021, MGI satisfied its remaining $55 million penalty under the DPA and the independent compliance monitor certified to MoneyGram and the government that the company's anti-fraud and anti-money laundering compliance program meets the standard set forth in the DPA. We expect leverage to remain above 5.0x in 2021. We expect modest improvement in operating performance...

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