MoneyGram International

The stable outlook over the next 12 months indicates our expectation for EBITDA interest coverage of 3.0x-4.0x, 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 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, or further compliance deficiencies arise. It is unlikely we will upgrade the company in the next 12 months. The World Bank expects global consumer-to-consumer remittances to increase by 2.2% in 2022, compared with 7.3% in 2021, due to the rolling back of fiscal stimulus and employment-support programs as

...MoneyGram International (MGI) agreed to be acquired by private equity firm Madison Dearborn Partners (MDP) on Feb. 15, 2022. MGI will become a financial sponsor-controlled company after the transaction closes. Since our current ratings on MGI already reflect a highly leveraged financial risk profile, we do not expect the transaction to impact the ratings. We expect the company's leverage, measured by debt to adjusted EBITDA, to remain above 5.0x in 2022. MGI faces headwinds from 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 Remitly, Venmo, PayPal, and Zelle--to continue to challenge MGI's domestic transaction volume and pricing. The settlement of the Department of Justice's (DOJ) deferred prosecution agreement (DPA) helps alleviate regulatory pressure. The DOJ's criminal case against MGI was discharged after...

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