S&P: Cendant unaffected

Standard & Poor's said its ratings on Cendant Corp. (BBB+/stable/A-2) are not affected by the company's announcement that it intends to repurchase up to $500 million of its outstanding shares over the next several months, prior to its proposed split-up.

S&P said it expected that management would significantly scale back its share repurchase activity from its previous target of $2 billion in advance of the planned split-up of the company that was announced earlier this week.

Despite its lower earnings guidance for the next several quarters, the company is expected to generate significant discretionary cash flow with which to fund these planned repurchases, the agency said.

S&P said it continues to believe that the company will fully repay the existing corporate-level debt, and the potential timing difference does not materially alter the likelihood that this will occur.

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