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S&P downgrades Wyndham Destinations rating

S&P Global Ratings downgraded Wyndham Destinations Inc., formerly Wyndham Worldwide Corp., corporate credit rating to BB- from BBB-, after the company completed the spinoff of Wyndham Hotels & Resorts Inc. and the sale of its European vacation rental business.

The rating agency also removed all ratings on Wyndham Destinations, which now operates as a vacation ownership and rental company, from CreditWatch Negative. The ratings outlook is positive.

S&P said the new corporate credit rating takes into account increased business risks for the company following the closing of the deals and the rating agency's expectation that Wyndham Destinations will assume incremental leverage for an opportunistic acquisition, which would further drive financial risks over the next few years.

The positive outlook takes into account the rating agency's projection for the company to achieve mid- to high-single-digit percentage revenue and EBITDA growth through 2019 and its base-case forecast for adjusted leverage in the low-4x area for 2018, with a further drop over the next two years due to EBITDA growth.

This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings, a separately managed division of S&P Global. Descriptions in this news article were not prepared by S&P Global Ratings. The original S&P Global Ratings documents referred to in this news brief can be found here.