Cyber attack ratings fears for Travelex

TRAVELEX’S creditworthiness could be cut by ratings agencies Moody’s and Standard & Poor’s due to the cyber attack that has crippled the foreign exchange dealer.

The currency dealer shut down its website and smartphone app after it discovered that it had been infected by a ransomware virus called Sodinokibi or Revil on New Year’s Eve. Its bureau de change in cities and airports are active but are operating at reduced capacity as they are processing transactions manually.

In a note, Moody’s analysts Maria Maslovsky and Peter Firth wrote: “We expect the disruption to reduce revenue, increase costs and potentially erode margins, a credit negative. The ultimate credit effect on Travelex will depend on how long its business is disrupted, the extent of required remediation and related costs, as well as consumers’ continued confidence in the security of its sensitive operations.”

Travelex has a credit rating of -B3 from Moody’s, which is given to “highly speculative” and “subject to high credit-risk” borrowers. The firm has debts of more than £300million and made a £111.9 million loss according to its last set of accounts.

S&P has earmarked Travelex for a possible downgrade. It rates the firm as a B-. It said: “We could lower the final rating if the follow-on impact of this IT disruption causes significant reputation and financial damage, rendering the business model of the group unsustainable.”

Travelex says the virus has been contained and it is gradually restoring a number of internal systems.