S&P Global Ratings revised its ratings outlook on Realogy Holdings Corp. subsidiary Realogy Group LLC to negative from stable, citing a weak U.S. housing market and high leverage.
The rating agency also affirmed its ratings on the real estate services provider, including its issuer credit rating at BB-.
S&P attributed the outlook revision to the sharp decrease in home sales volume and increasing costs, along with levered share buybacks in 2018, which resulted in weaker performance than expected.
The negative outlook mirrors S&P's expectation that the company's leverage is highly likely to peak to the mid-5x area in the first half.
According to the rating agency, Realogy's rating factors in its leading position in the U.S. residential real estate market, extensive portfolio of brokerage brands, robust national footprint, and sizable revenue and EBITDA base. Partially counterbalancing these factors is a market that is characterized as highly competitive with low barriers to entry and demonstrates high levels of revenue and EBITDA volatility over the economic cycle.
This S&P Global Market Intelligence news article may contain information about credit ratings issued by S&P Global Ratings. Descriptions in this news article were not prepared by S&P Global Ratings.