Article/Intelligence
MoneyGram’s $550M Loan Trades Down as Companies With Immigration Policy Exposure Face Challenges
MoneyGram’s $550 million loan due 2030 has traded off several points over the summer on news of President Donald Trump’s crackdown on immigration, according to sources.
The loan was trading close to par at the start of the year prior to Trump’s entry to office, sources said. One trader noted that the loan is down about 5 points since the end of July to a quote of 87/89 today.
MoneyGram, a financial services company owned by Madison Dearborn Partners, is known for facilitating international wire transfers, a service many immigrants rely on to send money abroad. Sources pointed to recent news of Immigration and Customs Enforcement raids and deportations as causing the remittance company’s loan to trade off in recent months.
Federal immigration agents recently tracked down an undocumented immigrant who entered the U.S. 17 years ago through cash he sent via MoneyGram to Mexico, according to local news outlet Honolulu Civil Beat.
One source noted that the threats of deportation could have a substantial negative impact on a large segment of demand for the business. They cited, as a comp, Western Union, which on an earnings call this summer also cited fears around deportation as impacting its business.
While the loan has seemingly stabilized in recent weeks, sources say the long-term impacts of immigration policy on the company remain to be seen.
“As a private company, we don’t comment on market speculation or secondary trading of our debt,” said a spokesperson from MoneyGram. “What we can say is that we do not expect immigration to have a material impact on our business. Remittances are a necessity for many customers, and our global diversification tends to offset softness in one corridor with strength in others.”
Earlier this week, Tricolor Holdings – a buy-here-pay-here used car dealer with similar exposure to immigrant communities in the Southwest – filed a chapter 7 bankruptcy. Tricolor, which has disbursed over $5 billion in auto loans primarily to underserved Hispanic communities, is the only subprime auto asset-backed securities issuer certified by the U.S. Treasury as a Community Development Financial Institution.
Madison Dearborn Partners acquired MoneyGram in 2023 for $11 per share.
MoneyGram’s $550 million term loan was last quoted today, Sept.12, at 89.75/91.75, according to Solve.
Madison Dearborn Partners did not respond to requests for comment.
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