Travelex bonds slide as cyber attack chokes banks' forex sales

The bonds of travel money provider Travelex fell to an eight-month low on Friday after a ratings agency warned about the potential financial hit from a cyber attack last week that crippled its systems.

Travelex's outstanding bonds maturing in May 2022 hit their lowest since April 2019 on Friday, dropping to a cash price of 97.02 after opening on Wednesday at 102.1.

The yield on this bond, which moves inversely to price and represents the company's borrowing costs, rose as high as 9.57% on Friday, also the highest in over nine months. Since Tuesday's close, the yield has jumped 2.7 percentage points.

Ratings agency Standard & Poor's on Thursday night placed the company on CreditWatch negative, meaning it could downgrade the lender's debt rating if it ends up recording a hefty financial hit from the incident.

Shares in Travelex parent Finablr have fallen 25% since Jan. 2 when hackers using a software virus forced the company to take its systems offline.

A spokeswoman for Travelex said the firm had no update on when the problems might be resolved.

The hack has severely hurt British banks' ability to sell foreign currencies to holidaymakers, with a majority of high street lenders relying on Travelex to provide forex online and in their branches.

Barclays, HSBC, Lloyds, Royal Bank of Scotland, and the banking arms of supermarket giants Tesco and Sainsbury's were all unable to provide online foreign exchange on Friday.

Several of the lenders including Barclays said supplies of foreign currency were running out in their branches as well. None of them could provide a firm update on when they might be able to resume normal service.

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