S&P Global Ratings affirmed RE/MAX Holdings Inc.'s corporate credit rating at BB and removed it from CreditWatch.
The outlook is stable.
The rating agency believes that the real estate services company has taken sufficient steps to address a conflict that could arise from certain unreported transactions between its nonexecutive chairman David Liniger and CEO Adam Contos. S&P placed the company under CreditWatch in November 2017 while it carried out an internal investigation on the matter that involved a $2.4 million loan made by Liniger to Contos.
RE/MAX recently announced it has closed the investigation and concluded that the deal did not involve corporate funds.
The stable outlook reflects S&P's opinion that RE/MAX will continue to operate under an improving U.S. residential real estate market, and maintain its adjusted debt to EBITDA at below 3.5x. S&P also expects the company's funds from operations will provide a legroom in case of an economic downturn.
S&P also highlighted the company's move to establish a lead independent director and changes to its bylaws to create a sufficient management oversight.
S&P Global Ratings and S&P Global Market Intelligence are owned by S&P Global Inc.