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Why Shares of MoneyGram International Are Up Today

By Bram Berkowitz – Nov 8, 2021 at 2:42PM

Key Points

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The company announced that it will repay debt and repurchase shares.

What happened

Shares of MoneyGram International (MGI 0.14%) traded more than 11% higher as of 2:05 p.m. EST on Monday after the company announced several measures that will reduce debt, improve its capital base, and award shareholders.

So what

MoneyGram announced that it plans to repay $15 million of the principal on one of its terms loans. The company also announced that its board of directors had approved a plan to repurchase as much as $50 million of its common stock.

"This announcement demonstrates our confidence in MoneyGram's improving financial strength and long-term trajectory," CFO Larry Angelilli said in a statement. "These actions permit us to improve our capital structure by reducing our outstanding debt, which follows our successful refinancing earlier in the year, and further reduce our interest expense, which is now at the lowest level it has been in years."

Total debt at MoneyGram at the end of the third quarter stood at about $802 million, down from nearly $858 million at the end of 2020. Total debt consists of a $400 million term loan and $415 million of senior secured notes due in 2026.

Ascending arrows pointing up and to the right.

Image source: Getty Images.

Now what

It's easy to see why the market awarded MoneyGram today. Not only are shareholders about to get a bigger slice of future earnings due to the share repurchase, but it's also always good as a shareholder to see management addressing debt and continuing to pay it down.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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