S&P: Cendant outlook positive

Standard & Poor's said it revised its outlook for Cendant Corp. to positive from negative and its outlook for Cendant's wholly owned subsidiary, PHH Corp., to stable from negative.

At the same time, all related ratings, including the BBB corporate credit rating on Cendant and the BBB+ counterparty credit rating on PHH, were affirmed.

S&P said the outlook revision reflects good operating momentum at the company amid relatively healthy economic conditions, the reduction of about $800 million in corporate debt in 2003, and the expectation that about $2 billion in additional corporate debt will be eliminated by the end of 2004 due to the repayment of certain obligations and the conversion of others into common stock. As a result, credit measures are expected to improve meaningfully in 2004.

S&P said the ratings for Cendant reflect its solid position in residential real estate and auto rental, relatively good position in hospitality and travel distribution, and niche position in financial services. Ratings also reflect the company's ownership of many well regarded brands and the company's strong historical cash flow.

These factors are offset by the company's exposure to the real estate and travel and leisure industries, which may be affected by cyclical economic trends or geo-political events, and a historically aggressive growth strategy.

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