Money transfer company Western Union Inc. (WU) yesterday announced the pricing of its new issue of notes due 2020. The exchange price has been set at $1,070.10 for each $1,000 principal amount of old notes tendered.

Western Union, which announced the new issue of notes earlier during the month, is doing so to exchange $500 million of aggregate principal notes outstanding due 2011. The new notes will carry an interest rate of 5.253%, with expiration due in Apr 2020.

The exchange offer, which required at least $250 million of the notes to be validly tendered, has been met as of Mar 15, 2010, when $279 million of old outstanding notes had been tendered for exchange. The transaction is set to close at 12:00 midnight Eastern Time, on March 29, 2010, unless extended.

Since the company’s spin-off from First Data (FDS) in 2006, its interest coverage ratio has been around 7.5. The decline in the ratio from the previous levels was due to debt acquired in connection with the spin-off. Since then, the debt levels have stood at approximately $3 billion.

Western Union took similar action last year when it issued $500 million aggregate principal amount of 2014 notes to repay the term loan that was scheduled to mature in Dec 2009.

 As of Dec 31, 2009, Western Union’s senior unsecured debt carried ratings of “A-“,”A3″ and “A-“ from S&P, Moody’s and Fitch, respectively, with a Stable outlook.

Estimate Revisions
 
Over the last 30 days as well as the last 7 days, the stock of Western Union has not experienced any estimate revisions for the first quarter 2010 from any of the 23 analysts covering the stock. Currently, the Zacks Consensus Estimate for the first quarter is an operating profit of 30 cents per share, which would be down 6.25% from the year-ago quarter.

The absence of estimate revisions for the first quarter indicates a lack of any clear directional pressure on the performance of the stock in the near term.

With respect to earnings surprises, the stock has been steady over the last four quarters, with positive surprises all through. The average remained positive at 6.9%. This implies that Western Union has surpassed the Zacks Consensus Estimate by 6.9% over that period.
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