MoneyGram faces performance, money laundering concerns
Money transfer company MoneyGram International Inc is struggling to finalize a US$663m loan as its financial performance wilts under fierce competition following a US$125m US government fine last year for poor money-laundering controls, Reuters said.
Moody’s also changed MoneyGram’s outlook to negative, saying the higher cash interest costs from the proposed new loan facilities would lead to “just breakeven to modestly positive” free cash flow over the next 12 to 18 months.
Investors remain concerned about a range of issues, including the company’s financial performance, competitive position and potential exposure to money laundering, despite improvements to MoneyGram’s compliance system.
MoneyGram International, Inc. has agreed to pay $125 million to settle allegations that the company failed to take steps required under a 2009 Federal Trade Commission order to crack down on fraudulent money transfers that cost U.S. consumers millions of dollars.
