Fitch could downgrade Wyndham

Fitch Ratings said it placed Wyndham Worldwide Corp. and its subsidiary Wyndham Global Finance plc on rating watch negative.

The agency views Wyndham's planned spin-off of its more stable and less capital intensive lodging business into a new public company (NewCo) as a credit negative that could result in a multi-notch ratings downgrade for Wyndham and its operating subsidiaries (collectively RemainCo).

Fitch said it regards the timeshare industry's credit attributes as weaker than the lodging industry's due to greater earnings volatility and capital intensity. It estimates that roughly half of Wyndham's revenues and slightly less than half of its EBITDA comes from timeshare operations (including a small amount of timeshare-related fee revenue).

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