Fitch Downgrades MoneyGram’s IDR to ‘B-‘ With Stable Outlook
Fitch Ratings has downgraded MoneyGram International, Inc.’s Long-Term Issuer Default Rating (IDR) to ‘B-‘ from ‘B’ and the company’s revolver, term loan and 1L secured bonds to ‘B’ with a Recovery Rating of ‘RR3’ from ‘B+’/’RR3’.
According to Fitch, the rating outlook is stable, noting that the downgrades reflect expectation that MoneyGram will continue to operate outside the EBITDA leverage negative sensitivity as its revenues are expected to remain pressured amid declining retail and digital payments segments.
The rating also reflects its greater reliance on money transfer services relative to more diversified and higher-rated fintech peers, its smaller scale, and lower cash flow profitability.
MoneyGram’s ratings also reflect the company’s established position in retail cross-border money transfers and its expanding digital business.
MoneyGram’s revenue declined 11% in FY2025, primarily due to restrictions on money transfers in one of its Middle East markets and lower interest income.
About 55% of the company’s revenue comes from its retail channel, which has been under pressure as consumers increasingly migrate to digital money transfer services across the fintech sector. Rising competition has also weighed on take rates.
In addition, tighter U.S. immigration policies and stronger enforcement, including deportations, could further pressure transaction volumes in key corridors. Fitch expects revenue to remain flat or grow only modestly over the forecast period.
Fitch forecasts EBITDA leverage to remain in the mid-5.0x range through 2027, despite projected gradual improvement in EBITDA margins.
Leverage metrics could improve with the success of the company’s cost initiatives and its ability to expand digital services revenue under its omnichannel strategy.
However, the timing and extent of recovery are uncertain, with the company facing challenges due to a potentially volatile macroeconomic landscape, and intense competition.
The money transfer industry remains highly competitive, with tech-focused platforms such as Venmo, Xoom, Remitly and Wise PLC (BBB/Stable) challenging MoneyGram across multiple global corridors.
Fitch views slower digital adoption in certain international markets as supporting the value of MoneyGram’s extensive agent network, particularly for cash send and receive transactions.
However, MoneyGram was initially slow to transition to digital transfers, enabling newer entrants to gain market share. The company is now investing in expanding its digital capabilities, including mobile wallets and online and mobile deposit channels.
MoneyGram continues to face pressure as customers shift from physical locations to digital channels. While MoneyGram has built a digital presence, profitability remains pressured by lower take rates in its digital partners channel amid intense competition and modest growth in its proprietary MoneyGram Online platform.
Fitch expects the digital segment to expand in the coming years, which could offset pressure in the retail cash transfer business and support margin improvement. Growth in digital capabilities and integration of the retail network are central to MoneyGram’s omnichannel strategy.
MoneyGram is subject to a broad range of laws and regulations, including requirements related to anti-money laundering, consumer privacy and data security.
Beginning in 2012, the company operated under a deferred prosecution agreement with the U.S. Department of Justice, which increased compliance costs and resulted in significant settlement payments related to consumer fraud.
The agreement ended in 2023. While the conclusion of the investigation does not eliminate fraud and litigation risk, Fitch believes MoneyGram is better positioned to manage these exposures.
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