MoneyGram 2008 Annual Report Download - page 58

Table of Contents
from the auction rate securities equal to the fair value of the put options received, with a corresponding gain in the Consolidated
Statements of (Loss) Income. Changes in the fair value of the put options are recognized in the "Net securities losses" line in the
Consolidated Statements of (Loss) Income.
In January 2008, Moody's Investor Service ("Moody's"), Standard & Poors ("S&P") and Fitch Ratings ("Fitch") downgraded our senior
unsecured debt rating to non-investment grade at Ba1, BB and BB-, respectively. In March 2008, S&P downgraded our senior unsecured
debt rating to B+. Moody's, S&P and Fitch have also placed us on watch for potential additional downgrades. It is possible that one or
more rating agencies will downgrade our debt rating in the future; however, there is no impact to our Senior Facility or Notes if such a
downgrade were to occur. Any change in our debt rating would not affect our regulatory status as state and federal regulatory authorities
do not consider such ratings as criteria in determining licensing or regulatory compliance.
Other Funding Sources and Requirements
At December 31, 2008, we had overdraft facilities consisting of $7.6 million of letters of credit to assist in the management of our
investments and the clearing of our payment service obligations. All of these letters of credit were outstanding as of December 31, 2008,
but no amounts have been drawn under the letters of credit. These overdraft facilities reduce the amounts available under the Senior
Facility described in Note 10 — Debt of the Notes to Consolidated Financial Statements; accordingly, disclosures of amounts available
under the Senior Facility include the outstanding letters of credit.
Contractual Obligations — The following table includes aggregated information about the Company's contractual obligations that impact
its liquidity and capital needs. The table includes information about payments due under specified contractual obligations, aggregated by
type of contractual obligation.
Table 9 — Contractual Obligations
Payments due by period
Less than More than
(Amounts in thousands) Total 1 year 1-3 years 4-5 years 5 years
Debt, including interest payments $ 1,742,573 $ 101,694 $ 202,576 $ 657,661 $ 780,642
Operating leases 44,510 10,536 17,375 9,025 7,574
Other obligations $ 636 636 — — —
Total contractual cash obligations $ 1,787,719 $ 112,866 $ 219,951 $ 666,686 $ 788,216
Debt consists of amounts outstanding under the term loan and revolving credit facility at December 31, 2008, as described in Note 10 —
Debt of the Notes to Consolidated Financial Statements, as well as related interest payments, facility fees and annual commitment fees.
Included in our Consolidated Balance Sheet at December 31, 2008 is $978.9 million of debt, net of unamortized discounts of
$14.2 million, and $0.1 million of accrued interest on the debt. The above table reflects the principal and interest that will be paid through
the maturity of the debt using the rates in effect on December 31, 2008. At December 31, 2008, we had outstanding borrowings under the
Senior Facility of $493.1 million. Our outstanding debt has a floating interest rate indexed to either the U.S. prime bank rate or LIBOR
based on our election. For disclosure purposes, the interest rate for future periods has been assumed to be 5.75 to 7.25 percent, which are
the rates in effect on December 31, 2008 based on the U.S. prime bank rate. At December 31, 2008, we had outstanding borrowings
under the Notes of $500.0 million. The interest expense on the Notes is payable quarterly at a rate of 13.25 percent. Prior to March 25,
2011, the Company can elect to capitalize the interest when due, but if so elected, the interest rate increases to 15.25 percent. The
Company has paid the interest payments due on the Notes and Table 9 assumes that the Company will continue to pay interest as due.
Operating leases consist of various leases for buildings and equipment used in our business. Other obligations are unfunded capital
commitments related to our limited partnership interests included in our investment portfolio. We have other commitments as described
further below that are not included in Table 9.
The Series B Stock has a cash dividend rate of 10 percent. At the Company's option, dividends may be accrued through March 25, 2013
at a rate of 12.5 percent in lieu of paying a cash dividend. Due to restrictions in our debt agreements, we elected to accrue the dividends
in 2008 and expect that dividends will be accrued and not paid in
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