Moody's may downgrade Wyndham

Moody's Investors Service said it placed Wyndham Worldwide Corp.'s Baa2 senior unsecured ratings on review for possible downgrade due to its view that both the company's liquidity and earnings outlook have weakened.

Because of an expected reduction in advance rates under a new timeshare conduit facility, the company will need to finance a greater proportion of timeshare receivables with drawings from its $900 million revolving credit facility. The agency said this will cause availability under the revolver - and hence the company's overall sources of external financing - to shrink.

Moody's said this comes at a difficult time: Wyndham has an upcoming $172 million debt maturity in June 2009 and weakening demand in the lodging and timeshare industries is likely to pressure earnings over the next 12 months, causing credit metrics to deteriorate.

The review will focus on Wyndham's plans to boost its alternate sources of liquidity.

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