Travelex issues statement regarding S&P rating cut

Maria Nikolova

Standard & Poor’s have lowered to ‘CCC’ from ‘B-‘ their ratings on Travelex Holdings Ltd. and the issue rating on the €360 million notes due 2022 to ‘CCC-‘ from ‘B-‘.

Finablr’s brand Travelex has sought to respond to a rating cut announced by Standard & Poor’s on March 4, 2020, shortly after Travelex said the recent cyber-attack and the outbreak of Covid-19 would have a negative impact on its financial results.

Travelex warned that the effects of the ransomware attack, combined with lower transaction volumes from COVID-19, will reduce its underlying EBITDA for the first quarter of 2020 by £25 million. S&P said that the effect would be to make the capital structure deeply unsustainable.

Additionally, S&P believe that an event of default in the debt at BRS Ventures & Holdings Ltd. (BRSV; the financing vehicle of Dr. B. R. Shetty) over the next few months could trigger the change-of-control clause under the documentation of Travelex’s bonds (through the enforcement of the pledge over Finablr shares). Dr. B R. Shetty and his son hold about 66% of Finablr, which in turn holds 100% of Travelex, S&P explains.

That is why, S&P lowered to ‘CCC’ from ‘B-‘ their ratings on Travelex Holdings Ltd. and their issue rating on the €360 million notes due 2022 to ‘CCC-‘ from ‘B-‘. S&P lowered their issue rating on the £90 million super senior revolving credit facility (RCF) to ‘B-‘ from ‘B+’. The ratings remain on CreditWatch negative.

Today, Travelex said it is disappointed with the decision about the rating downgrade but remains committed to developing its business in 2020.

Travelex currently expects to off-set a material portion of the losses from insurance in relation to the cyber incident. Timing is yet to be determined on when Travelex will receive the insurance payment.

Furthermore, Travelex and its listed parent company Finablr are in discussions with major lenders regarding the terms of the Travelex Revolving Credit Facility.

Tony D’Souza, CEO of Travelex, said ‘We acknowledge that these are unprecedented and challenging circumstances for Travelex. I would like to reassure our customers, partners and employees that we are committed to ensuring the best interests of all our stakeholders as we continue to focus on delivering on our 2020 agenda.’

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