MoneyGram 2015 Annual Report Download - page 45

Table of Contents
See Note 9 — Debt of the Notes to the Consolidated Financial Statements for additional disclosure related to the Company's credit facilities and financial
covenants.
Equity Registration Rights Agreement
The Company and the Investors entered into a Registration Rights Agreement (the "Equity Registration Rights Agreement") on March 25, 2008, with respect to the
Series B Stock, D Stock, and the common stock owned by the Investors and their affiliates, also referred to collectively as the Registrable Securities. Under the
terms of the Equity Registration Rights Agreement, we are required to file with the SEC a shelf registration statement relating to the offer and sale of the
Registrable Securities and keep such shelf registration statement continuously effective under the Securities Act until the earlier of (1) the date as of which all of
the Registrable Securities have been sold, (2) the date as of which each of the holders of the Registrable Securities is permitted to sell its Registrable Securities
without registration pursuant to Rule 144 under the Securities Act and (3) fifteen years. The holders of the Registrable Securities are also entitled to six demand
registrations and unlimited piggyback registrations during the term of the Equity Registration Rights Agreement. The SEC has declared effective a shelf
registration statement on Form S-3 that permits the offer and sale of the Registrable Securities, as required by the terms of the Equity Registration Rights
Agreement. The registration statement also permits the Company to offer and sell up to $500 million of its common stock, preferred stock, debt securities or any
combination of these, from time to time, subject to market conditions and the Company’s capital needs.
Credit Ratings
As of December 31, 2015 , our credit ratings from Moody’s and S&P were B1 and B+, respectively, both with a stable outlook. On April 13, 2015, S&P lowered
our credit rating from BB- with a negative outlook to B+ with a stable outlook. Our credit facilities, regulatory capital requirements and other obligations were not
impacted, and will not be impacted by a future change in our credit ratings.
Regulatory Capital Requirements and Contractual Obligations
RegulatoryCapitalRequirements
We have capital requirements relating to government regulations in the U.S. and other countries where we operate. Such regulations typically require us to
maintain certain assets in a defined ratio to our payment service obligations. Through our wholly-owned subsidiary and licensed entity, MPSI, we are regulated in
the U.S. by various state agencies that generally require us to maintain a pool of liquid assets and investments in an amount generally equal to the regulatory
payment service obligation measure, as defined by each state, for our regulated payment instruments, namely teller checks, agent checks, money orders and money
transfers. The regulatory requirements do not require us to specify individual assets held to meet our payment service obligations, nor are we required to deposit
specific assets into a trust, escrow or other special account. Rather, we must maintain a pool of liquid assets. Provided we maintain a total pool of liquid assets
sufficient to meet the regulatory and contractual requirements, we are able to withdraw, deposit or sell our individual liquid assets at will, without prior notice,
penalty or limitations. We were in compliance with all state capital requirements as of December 31, 2015 .
We are also subject to regulatory capital requirements in various countries outside of the U.S., which typically result in a requirement to either prefund agent
settlements or hold minimum required levels of cash or guarantees within the applicable country. The amounts can fluctuate based on our level of activity and is
likely to increase over time as our business expands internationally. Assets used to meet these regulatory requirements support our payment service obligations and
are not available to satisfy other liquidity needs. As of December 31, 2015 , we had $103.2 million of cash designated to meet regulatory capital requirements and
such amounts are included in "Settlement assets" on the Consolidated Balance Sheet.
We were in compliance with all regulatory capital requirements as of December 31, 2015 . We believe that our liquidity and capital resources will remain sufficient
to ensure ongoing compliance with all regulatory capital requirements.
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