'BBB-' Corporate Credit Rating AffirmedNew York, Oct. 31, 2008--Standard & Poor's Ratings Services has revised its outlook on Parsippany, NJ-based
Wyndham Worldwide Corp. to negative from stable. At the same time, we affirmed the 'BBB-' corporate credit rating on the company.
(Wyndham's Chateau Bourbon Hotel, New Orleans, top left photo)
The negative outlook revision reflects:
Lower-than-expected EBITDA generation in 2008 and 2009.
We previously expected revenue and EBITDA would increase in the high-single-digit percentage area in 2008 and in the low-single-digit percentage area in 2009, and we now expect growth of flat-to-low-single digits in 2008 and flat-to-low-single digit declines in 2009.
This is primarily due to a reduction in expected timeshare segment EBITDA to flat in 2008 compared to up nearly 10%, and for an expected decline in that business in 2009 compared to modest growth previously.
We expect Wyndham's lodging franchise business will exhibit a low-single-digit decline in EBITDA driven by a modest decline in revenue in 2009 as revenue per available room declines of 5% or more (our current expectation for the U.S. lodging industry) offset low-single-digit room growth.
(Wyndham's Baolian Hotel, Shanghai, top right photo)
We also have a moderately lower view of expected EBITDA at the RCI timeshare exchange and vacation rental businesses, although we expect that business to maintain relatively stable cash flow characteristics; and
A meaningful increase in total lease-and-captive-finance adjusted debt balances over the intermediate term due to a decrease in the expected advance rate Wyndham would receive for selling its timeshare receivables.
(Wyndham brand, Ramada Plaza Zhangjiaje, China, middle left photo)
Wyndham stated it expects the advance rate to decline to about 60% from near-80% under its 364-day bank timeshare receivables conduit facility, which the company expects to refinance on or about Nov. 10, 2008, with capacity of at least $800 million (down from $1.2 billion in capacity at September 2008).
While we are pleased that investor appetite likely remains for lending against timeshare paper, it will be at a price that is adjusted for intermediate-term risk assessments.
As a result, lower current and expected advance rates over the intermediate term have led us to revisit the appropriate level of debt to be removed from the balance sheet in our captive finance adjustment, and to lower this amount to the equivalent of 60% of net securitized receivables from 80%.
The net effect is to raise adjusted debt balances in our credit measure calculations.
(Wyndham's Cap Cana Resort, Dominican Republic, bottom right photo)
"The rating on Wyndham reflects the company's leading market positions in each of its business units and the stable cash flow characteristics of the lodging and RCI vacation network businesses," said Standard & Poor's credit analyst Emile Courtney.
We view Wyndham's business profile as investment grade, incorporating Standard & Poor's positive view of management as prudent business operators and a good level of business diversity.
High levels of capital intensity in the timeshare development industry and the company's participation in highly competitive markets offset these positive factors somewhat.
(Wyndham brand, Ramada Beirut Hotel, Lebanon, bottom left photo) 
Another key rating factor is our expectation that the company will maintain investment-grade financial metrics, with lease-and-captive-finance-adjusted leverage at around 3.5x or less on average over the economic cycle.
We also expect the company to maintain access to the securitization markets as a source of funding during the long term, even if the cost of financing is likely to increase materially over the intermediate term.
Media Contact: Mimi Barker, New York (1) 212-438-5054,
mimi_barker@standardandpoors.comAnalyst Contacts:Emile Courtney, CFA, New York (1) 212-438-7824
Liz Fairbanks, New York (1) 212-438-7459
AUSTIN, TX– Marcus & Millichap Real Estate Investment Services, the nation’s largest real estate investment services firm, has named Mark Villanueva (top right photo) of Austin, a director of the firm’s National Self-Storage Group in Austin, according to Steve Ekovich, (bottom left photo) national director of the firm’s National Self-Storage Group. 
Villanueva joined Marcus & Millichap in March 2005 and was promoted to associate in August 2006. Currently serving as a senior associate, Villanueva has closed more than $63 million in transactions. He is currently listing more than $79 million in self-storage inventory that is either in escrow or on the market throughout the state of Texas.
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