Settlement assets represent funds received or to be received from agents for unsettled money transfers, money orders, and consumer payments. The Company records corresponding settlement obligations relating to amounts payable under money transfers, money orders, and consumer payment service arrangements. Settlement assets and obligations also include amounts receivable from, and payable to, customers for the value of their cross-currency payment transactions related to the Business Solutions segment.

Receivables from agents represent funds collected by such agents, but in transit to the Company, and were $1,171.7 million as of June 30, 2020. Cash received by Western Union agents generally becomes available to the Company within one week after initial receipt by the agent. Western Union has a large and diverse agent base, thereby reducing the credit risk of the Company from any one agent. The Company performs ongoing credit evaluations of its agents’ financial condition and credit worthiness.

Receivables from Business Solutions customers arise from cross-currency payment transactions in the Business Solutions segment. Business Solutions receivables totaled $61.9 million as of June 30, 2020. Receivables occur when

funds have been paid out to a beneficiary but not yet received from the customer. Collection of these receivables ordinarily occurs within a few days. To mitigate risk associated with potential Business Solutions customer defaults, the Company performs credit reviews on an ongoing basis.

On January 1, 2020, the Company adopted a new accounting standard related to the estimation of the allowance for credit losses, as discussed in Note 1. However, due to the short-term nature of the Company’s receivables and the Company’s historical and expected collections practice, the adoption did not have a material impact on the Company’s financial position or results of operations.

The Company separately establishes and monitors an allowance for credit losses related to receivables from agents and Business Solutions customers. The Company estimates the allowance based on its historical collections experience, adjusted for current conditions and forecasts of future economic conditions, including those related to COVID-19. Given the short-term nature of these receivables, the Company would not expect the impact of forecasted economic conditions on its allowance for credit loss to be significant. However, during the three and six months ended June 30, 2020, the Company experienced delays in its collections from certain of its agents in connection with COVID-19 agent location closures and other impacts, and the Company believes these delays were largely temporary as certain agents were not able to remit settlement funds during lockdowns or other stay-at-home orders. Still, some of the Company’s agents, such as small businesses, may not easily be able to resume operations due to COVID-19. The Company has estimated credit losses based on information known as of June 30, 2020.

The following table summarizes activity in the allowance for credit losses on receivables from agents and Business Solutions customers (in millions):

(a)	Provision does not include losses from chargebacks or fraud associated with transactions initiated through our electronic channels, as these losses are not credit-related.

Investment securities included in Settlement assets in the Company’s Condensed Consolidated Balance Sheets consist primarily of highly-rated state and municipal debt securities, including fixed-rate term notes and variable-rate demand notes. Variable-rate demand note securities can be put (sold at par) typically on a daily basis with settlement periods ranging from the same day to one week but have varying maturities through 2050. These securities may be used by the Company for short-term liquidity needs and held for short periods of time. Investment securities are exposed to market risk due to changes in interest rates and credit risk. The Company is required to hold highly-rated, investment grade securities and such investments are restricted to satisfy outstanding settlement obligations in accordance with applicable regulatory requirements.

The Company’s investment securities are classified as available-for-sale and recorded at fair value. Western Union regularly monitors credit risk and attempts to mitigate its exposure by investing in highly-rated securities and through investment diversification.

Unrealized gains on available-for-sale securities are excluded from earnings and presented as a component of accumulated other comprehensive loss, net of related deferred taxes. Available-for-sale securities with a fair value below the amortized cost basis are evaluated on an individual basis to determine whether the impairment is due to credit-related

factors or noncredit-related factors. Factors that could indicate a credit loss exists include but are not limited to: (i) negative earnings performance, (ii) credit rating downgrades, or (iii) adverse changes in the regulatory or economic environment of the asset. Any impairment that is not credit-related is excluded from earnings and presented as a component of accumulated other comprehensive loss, net of related deferred taxes, unless the Company intends to sell the impaired security or it is more likely than not that the Company will be required to sell the security before recovering its amortized cost basis. Credit-related impairments are recognized immediately as an adjustment to earnings, regardless of whether the Company has the ability or intent to hold the security to maturity, and are limited to the difference between fair value and the amortized cost basis. As of and for the three and six months ended June 30, 2020, the Company’s allowance for credit losses and provision for credit losses on its available-for-sale securities were immaterial.

The components of investment securities are as follows (in millions):


					Gross		Gross		Net
	Amortized		Fair		Unrealized		Unrealized		Unrealized
June 30, 2020	Cost		Value		Gains		Losses		Gains/(Losses)
Settlement assets:
Cash and cash equivalents:
Money market funds	$	22.9	$	22.9	$	—	$	—	$	—
Available-for-sale securities:
State and municipal debt securities ^(a)		1,274.2		1,333.8		60.1		(0.5)		59.6
State and municipal variable-rate demand notes		441.3		441.3		—		—		—
Corporate debt securities		65.4		66.5		1.1		—		1.1
United States government agency mortgage-backed securities		58.7		60.4		1.7		—		1.7
Total available-for-sale securities		1,839.6		1,902.0		62.9		(0.5)		62.4
Total investment securities	$	1,862.5	$	1,924.9	$	62.9	$	(0.5)	$	62.4


					Gross		Gross		Net
	Amortized		Fair		Unrealized		Unrealized		Unrealized
December 31, 2019	Cost		Value		Gains		Losses		Gains/(Losses)
Settlement assets:
Cash and cash equivalents:
Money market funds	$	24.6	$	24.6	$	—	$	—	$	—
Available-for-sale securities:
State and municipal debt securities ^(a)		1,227.4		1,257.8		31.0		(0.6)		30.4
State and municipal variable-rate demand notes		276.1		276.1		—		—		—
United States government agency mortgage-backed securities		66.3		67.2		0.9		—		0.9
Corporate debt securities		52.3		52.4		0.1		—		0.1
Other United States government agency debt securities		34.9		34.9		—		—		—
United States Treasury securities		9.8		10.0		0.2		—		0.2
Total available-for-sale securities		1,666.8		1,698.4		32.2		(0.6)		31.6
Total investment securities	$	1,691.4	$	1,723.0	$	32.2	$	(0.6)	$	31.6

(a)	The majority of these securities are fixed-rate instruments.

The following summarizes the contractual maturities of available-for-sale securities within Settlement assets as of June 30, 2020 (in millions):


	Fair Value
Due within 1 year	$	163.8
Due after 1 year through 5 years		680.4
Due after 5 years through 10 years		463.7
Due after 10 years		594.1
Total	$	1,902.0

Actual maturities may differ from contractual maturities because issuers may have the right to call or prepay the obligations or the Company may have the right to put the obligation prior to its contractual maturity, as with variable-rate demand notes. Variable-rate demand notes, having a fair value of $15.0 million, $1.0 million, and $425.3 million were included in the categories "Due after 1 year through 5 years," "Due after 5 years through 10 years," and "Due after 10 years," respectively, in the table above.

In addition, from time to time, the Company has made advances to its agents. We generally owe settlement funds payable to these agents that offset these advances. These amounts advanced to agents are included within Other assets in the accompanying Condensed Consolidated Balance Sheets. As of June 30, 2020, amounts advanced to agents were $117.9 million, and the related allowance for credit losses was immaterial.