MoneyGram negotiating realignment of its investment portfolio after losses

By Lisa Kerner

Charlotte, N.C., Jan. 15 - MoneyGram International, Inc. began a process to realign its investment portfolio away from asset-backed securities and into "highly liquid assets."

The company completed the valuation of its investment portfolio as of Nov. 30, bringing to light additional net unrealized losses of $571 million for a cumulative net unrealized loss of $860 million.

MoneyGram expects the realigned portfolio to be comprised mainly of government, government agency and municipal securities.

The company is negotiating exclusively with an investment group led by Thomas H. Lee Partners, LP concerning a comprehensive recapitalization that includes a capital infusion of $750 million to $850 million in equity and $550 million to $750 million in new debt facilities.

In addition, MoneyGram expects to have $350 million outstanding or available under its existing credit agreement, a company news release stated.

The portfolio losses do not immediately impact MoneyGram's cash flow. The company said it has sufficient daily liquidity supplemented by liquid portfolio assets, including cash and cash equivalents of $1.5 billion.

MoneyGram is a payment services company based in Minneapolis.

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