Moody’s changes RE/MAX outlook to negative

Moody’s Investors Service said it revised the outlook to negative from and stable and affirmed RE/MAX, LLC’s (RE/MAX) ratings, including the Ba3 ratings on the company and its revolver and senior secured first-lien term loan. Concurrently, Moody’s assigned a speculative grade liquidity rating of SGL-2, reflecting good liquidity.

“The outlook change to negative reflects Moody’s expectation that a sharp decline in home sale transaction volume in 2020 and disruptions to RE/MAX’s and its franchisees business caused by the coronavirus outbreak will lead to earnings decline and a spike in leverage in 2020,” according to Dilara Sukhov, Moody’s lead analyst on Re/Max, in a press release.

“The protections offered by the company’s 100%-franchise structure, good liquidity and the expectation that the company’s metrics will rebound as the U.S. housing market recovers in 2021 support the affirmation of the ratings,” Sukhov said.

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