Ant Financial Close To $3.5B Loan As Part Of MoneyGram Deal

Ant Financial, the Chinese financial unit of China’s eCommerce giant Alibaba, is nearing a deal on a $3.5 billion loan as part of its purchase of MoneyGram International, the U.S. money transfer company.

According to a report in Reuters, 14 banks — including Australia and New Zealand Banking Group, Citigroup, Credit Suisse, Goldman Sachs, HSBC, Morgan Stanley and JPMorgan — are taking part in the loan. The loan has a three-year term and will replace a bridge facility that was used to back its bid for MoneyGram.

Reuters noted that for the global banks, providing the loan is designed to put them in a position to play a role in the eventual IPO of Ant Financial. That strategy has paid off in the past. When Ant Financial, which is owned in part by the Chinese government, announced its plans in January to acquire U.S.-based money-transfer company MoneyGram for $880 million, significant worries arose. Specifically, the concerns are around the exposure of millions of Americans’ personal data, including government employees and military.

Several U.S. lawmakers and national security experts have voiced concerns that the Committee on Foreign Investment is ill-equipped to assess this acquisition process to fully determine all security weaknesses of the deal. North Carolina Representative Robert Pittenger voiced his thoughts on the businesses deal: “If the transaction is approved, China would gain direct access to a significant amount of transactional data in MoneyGram’s network. The data would include names, bank account numbers, as well as the location of MoneyGram customers.” With several MoneyGrams close to U.S. military bases and locations in approximately 200 countries, the U.S. fears this business deal would make the country more prone to foreign espionage and cyberattacks. Many U.S. officials are calling for a more rigorous review of the deal.

“Ant Financial is a private sector company and while a handful of Chinese state-owned or -affiliated funds own non-controlling minority stakes, they do not participate in company management. Nor do they have board representation or any special rights. Around the world, Ant Financial works closely with regulators to ensure compliance in the areas of anti-money laundering, data protection, information security and consumer privacy,” an Ant Financial spokesperson said in  a statement. “Ant Financial volunteered and sought the CFIUS review of our proposed combination with MoneyGram and is steadfast in our commitment to protecting the data of U.S. consumers – as we currently do for more than 630 million users worldwide – as well as working with law enforcement in the U.S. and anywhere we operate to fight illicit financing.”


New PYMNTS Report: Preventing Financial Crimes Playbook – July 2020 

Call it the great tug-of-war. Fraudsters are teaming up to form elaborate rings that work in sync to launch account takeovers. Chris Tremont, EVP at Radius Bank, tells PYMNTS that financial institutions (FIs) can beat such highly organized fraudsters at their own game. In the July 2020 Preventing Financial Crimes Playbook, Tremont lays out how.

Click to comment