S&P cuts Wyndham Destinations

S&P said it lowered its corporate credit rating on Wyndham Worldwide Corp. (Wyndham Destinations Inc.) to BB- from BBB- and removed all ratings from CreditWatch, where they were placed with negative implications on Aug. 3, 2017.

In addition, the agency lowered the issue-level rating on the company's $2.4 billion in notes to BB- and assigned a 3 recovery rating, indicating an expectation for meaningful (50%-70%; rounded estimate: 50%) recovery in the event of a default.

The BB- issue-level rating and 3 recovery rating on Wyndham's $1 billion senior secured revolving credit facility due in 2023 and $300 million senior secured term loan due in 2025 were affirmed.

Wyndham Worldwide completed its separation transactions, including the spinoff of Wyndham Hotels & Resorts Inc. and the sale of its European vacation rental business.

S&P said the rating on Wyndham reflects heightened business risks following the completion of the separation transactions and a base-case forecast for lease- and captive-finance adjusted leverage in the low-4x area in 2018.

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