Fitch Removes Cendant Corp. from Rating Watch Evolving.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch has removed Cendant Corporation (CD) from Rating Watch Evolving, where it was placed on Oct. 24, 2005, and its ratings have been affirmed as listed below. The Rating Outlook is Stable. --Issuer Default Rating (IDR IDR In currencies, this is the abbreviation for the Indonesian Rupiah. Notes: The currency market, also known as the Foreign Exchange market, is the largest financial market in the world, with a daily average volume of over US $1 trillion. ) at 'BBB+'; --Revolving credit facility at 'BBB+'; --Senior unsecured notes at 'BBB+'; --Commercial paper at 'F2' CD has completed several steps since it announced its plan to separate into four independent, publicly traded companies publicly traded company A company whose shares of common stock are held by the public and are available for purchase by investors. The shares of publicly traded firms are bought and sold on the organized exchanges or in the over-the-counter market. on Oct. 23, 2005. These actions have lessened the risk of debt remaining at a weakened entity or deteriorating market conditions interfering with financing for the spun entities. In addition, a sale of its Travel Distribution Services division (see below) could provide proceeds sooner for debt reduction at CD. As a result, Fitch expects outstanding senior unsecured debt Unsecured debt Debt that does not identify specific assets that the debtholder is entitled to in case of default. at CD to be retired with the spin-offs of Real Estate Services (Realogy Corporation), Hospitality, and TDS TDS total dissolved solids. unless retired earlier because of the sale of TDS. Upon completion, Fitch expects to withdraw its securities ratings and the existing IDR rating for CD. Today, CD announced that, in addition to pursuing its previously announced plan to spin-off its Travel Distribution Services division (TDS) to shareholders, which is anticipated to occur in October 2006, it will also consider a sale of that division. CD also reiterated its plan to spin-off Realogy Corporation and Wyndham Worldwide to shareholders as previously announced, which would result in three separate public companies, including Avis Budget Group, Inc., if TDS is sold. The company anticipates that the net cash proceeds from a potential sale of TDS, if completed, would be utilized primarily to reduce the debt expected to be incurred by Realogy Corporation, Wyndham Worldwide and TDS to pay off the public corporate debt of CD. To date, a capital structure for Avis Budget Car Rental, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control and a preliminary capital structure for Realogy Corporation have been established. Financing for Avis Budget has been completed. CD has filed a registration statement on FORM 10 with the Securities and Exchange Commission, which includes a separation agreement and a preliminary information statement for Realogy. Realogy expects to incur $2.175 billion of debt (subject to change with a sale of TDS) and transfer this amount to CD for the reduction of CD's debt. A registration statement on FORM 10 filing for Wyndham Worldwide Corporation, CD's hospitality businesses, is expected shortly. On Dec. 31, 2005, CD had $3.9 billion of debt excluding asset backed debt. Despite continuing cash flow from operations Cash flow from operations A firm's net cash inflow resulting directly from its regular operations (disregarding extraordinary items such as the sale of fixed assets or transaction costs associated with issuing securities), calculated as the sum of net income plus noncash expenses , this amount is not anticipated to change significantly during the time until the spin offs are completed because cash costs for separation are material. These costs have been estimated by CD at $730 million - $850 million. See Fitch's press releases dated Dec. 13, 2005 and March 17, 2006 concerning Cendant and Avis Budget for additional information available on the Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. web site at www.fitchratings.com. Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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