Cendant, PHH Rtgs Lowered by S&P; Off CreditWatch

NY -- Standard&Poor's CreditWire 10/16/98 -- Standard&Poor's today lowered its ratings of Cendant Corp., wholly owned subsidiary PHH Corp., and related entities as listed below. All ratings are removed from CreditWatch, where they were placed with negative implications in March 1998 due to Standard&Poor's concern about the pace and scope of acquisitions. The PHH ratings recognize the company's newly strengthened firewall between itself and its parent, and enable Standard&Poor's to permit a two notch differential between PHH and Cendant's corporate credit ratings. Covenants that limit intercompany borrowings and dividends to a total of 40% of PHH's net income for the prior 12 months, restrict leverage to a maximum of 8 to 1,

...NY -- Standard & Poor's CreditWire 10/16/98 -- Standard & Poor's today lowered its ratings of Cendant Corp., wholly owned subsidiary PHH Corp., and related entities as listed below. All ratings are removed from CreditWatch, where they were placed with negative implications in March 1998 due to Standard & Poor's concern about the pace and scope of acquisitions. The PHH ratings recognize the company's newly strengthened firewall between itself and its parent, and enable Standard & Poor's to permit a two notch differential between PHH and Cendant's corporate credit ratings. Covenants that limit intercompany borrowings and dividends to a total of 40% of PHH's net income for the prior 12 months, restrict leverage to a maximum of 8 to 1, and require two-thirds bondholder approval have now been incorporated into its medium-term note indenture. The downgrades reflect the discovery of accounting irregularities at the CUC International Inc. unit subsequent to the CreditWatch listing (which caused...

Ratings Action