MoneyGram 2009 Annual Report Download - page 102

Table of Contents
MONEYGRAM INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
obligations. Other-than-temporary impairment charges of $70.3 million during 2008 were the result of further deterioration in the
markets. The Company continues to have the intent to sell its investments classified as "Other asset-backed securities."
At December 31, 2009 and 2008, approximately 93 percent of the available-for-sale portfolio is invested in debentures of United States
government agencies or securities collateralized by United States government agency debentures. These securities have always had the
implicit backing of the United States government. During 2008, the United States government took action to place certain agencies under
conservatorship and provide unlimited lines of credit through the United States Treasury. These actions served to provide greater comfort
to the market regarding the intent of the United States government to back the securities issued by its agencies. The Company expects to
receive full par value of the securities upon maturity or pay-down, as well as all interest payments. The "Other asset-backed securities"
continue to have market exposure. The Company has factored this risk into its fair value estimates, with the average price of an asset-
backed security at $0.04 per dollar of par at December 31, 2009.
Investment Ratings — In rating the securities in its investment portfolio, the Company uses ratings from Moody's Investor Service
("Moody's"), Standard & Poors ("S&P") and Fitch Ratings ("Fitch"). If the rating agencies have split ratings, the Company uses the
highest rating from either Moody's or S&P for disclosure purposes. Securities issued or backed by United States government agencies are
included in the AAA rating category. Investment grade is defined as a security having a Moody's equivalent rating of Aaa, Aa, A or Baa
or an S&P or Fitch equivalent rating of AAA, AA, A or BBB. The Company's investments at December 31 consisted of the following
ratings:
2009 2008
Number of Fair Percent of Number of Percent of
(Dollars in thousands) Securities Value Investments Securities Fair Value Investments
AAA, including United States agencies 34 $ 276,215 92% 42 $ 409,672 94%
AA — — 0% 3 5,064 0%
A 1 415 0% 5 2,919 1%
BBB 1 1,842 1% 2 543 0%
Below investment grade 69 20,161 7% 68 20,576 5%
Total 105 $ 298,633 100% 120 $ 438,774 100%
Had the Company used the lowest rating from either Moody's or S&P in the information presented above, investments rated A or better
would have remained the same as of December 31, 2009 and been reduced by $3.5 million as of December 31, 2008.
Contractual Maturities — The amortized cost and fair value of available-for-sale securities at December 31, by contractual maturity, are
shown below. Actual maturities may differ from contractual maturities as borrowers may have the right to call or prepay obligations,
sometimes without call or prepayment penalties. Maturities of mortgage-backed and other asset-backed securities depend on the
repayment characteristics and experience of the underlying obligations.
2009 2008
Amortized Fair Amortized Fair
(Amounts in thousands) Cost Value Cost Value
After one year through five years $ 6,854 $ 7,715 $ 1,003 $ 1,073
After five years through ten years — — 15,460 16,376
Mortgage-backed and other asset-backed securities 275,269 290,918 412,979 421,325
Total $ 282,123 $ 298,633 $ 429,442 $ 438,774
Fair Value Determination — The Company uses various sources of pricing for its fair value estimates of its available-for-sale portfolio.
The percentage of the portfolio for which the various pricing sources were used is as
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