S&P gives BB- to Wyndham loans

S&P said it assigned its BB- issue-level rating and 3 recovery rating to Wyndham Worldwide Corp.'s proposed $1 billion senior secured revolving credit facility due 2023 and $300 million senior secured term loan due 2025.

S&P said its BBB- corporate credit rating on Wyndham Worldwide Corp. has been on CreditWatch negative since Aug. 3, 2017.

“Upon resolving the CreditWatch placement, we will likely lower the rating on soon-to-be-renamed Wyndham Destinations Inc., the remaining timeshare company, by three notches to BB- from BBB-. The ratings on the new debt are the same as the expected lower corporate credit rating. The 3 recovery rating indicates S&P’s view that lenders can expect meaningful (50%-70%; rounded estimate: 50%) recovery of principal in the event of a payment default.

“Now that the company has completed the various financing arrangements related to the spinoff of Wyndham Hotels & Resorts Inc. (including for the purchase of La Quinta Holdings Inc.'s hotel franchising and management business) and completed the sale of its European vacation rentals business, we expect to resolve the CreditWatch placement soon. We also expect to assign a positive outlook.”

Given that Wyndham Worldwide Corp.'s existing senior notes will become secured and pari passu with the planned revolver and term loan, S&P said it also expects to lower the issue-level rating on these notes to BB- from BBB-, with a recovery rating of 3.

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