Wyndham CFO cites options to create liquidity

DC4MS · 09-25-2008, 04:08 PM

Wyndham is the #1 timeshare company in the world. They have almost $2b in annual sales and about 800,000 owners/members

----------------

AP News

Wyndham CFO cites options to create liquidity

Monday September 22, 6:18 pm ET
Wyndham Worldwide CFO says alternatives exist to asset-backed securities market

NEW YORK (AP) -- The chief financial officer of Wyndham Worldwide Corp. said at an investor conference on Monday that there are alternatives to the asset-backed securities market for her company to create liquidity from its timeshare portfolio.

Speaking at the Thomas Weisel Partners Consumer Conference, CFO Virginia Wilson noted that about two-thirds of Wyndham's timeshare buyers are financed by the company at a broad range of credit risk.

Wyndham has reported higher level of defaults since late last year and has increased its provision for loan losses.

Thomas Weisel analyst Jake Fuller noted that Wyndham has gone to the asset-backed securities market to create liquidity and questioned the company's alternatives. But Wilson denied the market is closed.

"I would say the markets are not what you'd call organized or behaving sort of rationally in some respects," Wilson said. "That doesn't mean that there's no appetite for asset-backed paper out there at all, and we'll continue to look at the market on a regular basis."

Wilson also said that there are other options, citing whole loan sales and pledging a mortgage as collateral for a loan -- known as hypothecation.

"You can do a lot of different things to get liquidity out of a portfolio like that," Wilson said. "Some are more effective than others, some are easier to executive than others. They still require somebody on the other side who wants to buy the collateral or use the collateral as a good backstop for the money that they're lending."

Wyndham's stock has lost nearly 50 percent this year, hitting a low of $14.62 in mid-July, due in part to concerns about its timeshare business. The Aberdeen, S.D.-based company's shares dropped $1.31, or 7.6 percent, to $15.83 on Monday.

Wilson said Wyndham is focused on educating the public about the value of its timeshare business. But she said the company would not rule out alternative ownership structures for the segment if shareholder value continues to sink.

She said growing Wyndham's hotel business, particularly internationally, will also help balance. Wilson said customers continue to buy timeshares, despite the struggling economy, though "they have to be coaxed a little bit."

"We don't think we're immune or completely disconnected with the economy," she said.

Wilson said the company's fee-based timeshare exchange business is "very, very attractive" in the current economy because timeshare owners are simply taking advantage of property they have already purchased.

DC4MS · 10-06-2008, 06:40 PM

NEW YORK (AP) -- Shares of Wyndham Worldwide Corp. plunged with the broader market on Monday after the hotel company announced changes to its timeshare business and restructuring charges.

Wyndham shares dropped 87 cents, or 6.9 percent, to $11.83 in afternoon trading. They hit an all-time low of $11.05 earlier in the session.

Wyndham plans to refocus its timeshare business beginning in the fourth quarter. The Parsippany, N.J.-based company will shift its sales and marketing efforts to consumers with higher credit quality and cut back on timeshare development.

Wyndham said its timeshare business "performed well" in the third quarter with slight year-over-year gains in sales, tours, and volume per guest. The company said its consumer finance portfolio also continues to perform within expectations.

"Right or wrong, timeshare spooks investors," said Thomas Weisel Partners analyst Jake Fuller, who maintained an "Overweight" rating on the stock.

Wyndham's stock has dropped more than 20 percent since Marriott International Inc. said Thursday that its timeshare sales have dried up amid the tight credit market and cutbacks in business and consumer spending.

ER Traveler · 10-06-2008, 06:53 PM

I would love to know how many new DC members have signed up in the last 2 weeks! Things are getting ugly.

Friend of Sandman · 10-07-2008, 12:12 AM

Several of the DCs that I researched had a business model that revolved around growth as a critical success factor. While growth can be a bye-product of "success", and a "reward for a firm performing well" in a particular industry, several DCs are structured to only be able to survive independently by paying current expenses with the cash-flow fueled by the 20% non-refundable portion of the initial deposits.

For the DCs that are highly cash-flow sensitive, what other liquidity options are available to them in this time of financial paralysis?

10-06-2008, 06:40 PM	#2
DC4MS Administrator Join Date: Oct 2007 Location: USA Posts: 1,698 Club: DC4MS.com	Re: Wyndham CFO cites options to create liquidity NEW YORK (AP) -- Shares of Wyndham Worldwide Corp. plunged with the broader market on Monday after the hotel company announced changes to its timeshare business and restructuring charges. Wyndham shares dropped 87 cents, or 6.9 percent, to $11.83 in afternoon trading. They hit an all-time low of $11.05 earlier in the session. Wyndham plans to refocus its timeshare business beginning in the fourth quarter. The Parsippany, N.J.-based company will shift its sales and marketing efforts to consumers with higher credit quality and cut back on timeshare development. Wyndham said its timeshare business "performed well" in the third quarter with slight year-over-year gains in sales, tours, and volume per guest. The company said its consumer finance portfolio also continues to perform within expectations. "Right or wrong, timeshare spooks investors," said Thomas Weisel Partners analyst Jake Fuller, who maintained an "Overweight" rating on the stock. Wyndham's stock has dropped more than 20 percent since Marriott International Inc. said Thursday that its timeshare sales have dried up amid the tight credit market and cutbacks in business and consumer spending.

10-06-2008, 06:53 PM	#3
ER Traveler Senior Member Join Date: Dec 2007 Posts: 114 Club: Exclusive Resorts	Re: Wyndham CFO cites options to create liquidity I would love to know how many new DC members have signed up in the last 2 weeks! Things are getting ugly.

10-07-2008, 12:12 AM	#4
Friend of Sandman Senior Member Join Date: Jul 2008 Location: Bermuda Resident, U.S. Citizen Posts: 179 Club: Distinctive Holiday Homes	Re: Wyndham CFO cites options to create liquidity Several of the DCs that I researched had a business model that revolved around growth as a critical success factor. While growth can be a bye-product of "success", and a "reward for a firm performing well" in a particular industry, several DCs are structured to only be able to survive independently by paying current expenses with the cash-flow fueled by the 20% non-refundable portion of the initial deposits. For the DCs that are highly cash-flow sensitive, what other liquidity options are available to them in this time of financial paralysis? __________________ Friend of Sandman

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09-25-2008, 04:08 PM	#1
DC4MS Administrator Join Date: Oct 2007 Location: USA Posts: 1,698 Club: DC4MS.com	Wyndham CFO cites options to create liquidity Wyndham is the #1 timeshare company in the world. They have almost $2b in annual sales and about 800,000 owners/members ---------------- AP News Wyndham CFO cites options to create liquidity Monday September 22, 6:18 pm ET Wyndham Worldwide CFO says alternatives exist to asset-backed securities market NEW YORK (AP) -- The chief financial officer of Wyndham Worldwide Corp. said at an investor conference on Monday that there are alternatives to the asset-backed securities market for her company to create liquidity from its timeshare portfolio. Speaking at the Thomas Weisel Partners Consumer Conference, CFO Virginia Wilson noted that about two-thirds of Wyndham's timeshare buyers are financed by the company at a broad range of credit risk. Wyndham has reported higher level of defaults since late last year and has increased its provision for loan losses. Thomas Weisel analyst Jake Fuller noted that Wyndham has gone to the asset-backed securities market to create liquidity and questioned the company's alternatives. But Wilson denied the market is closed. "I would say the markets are not what you'd call organized or behaving sort of rationally in some respects," Wilson said. "That doesn't mean that there's no appetite for asset-backed paper out there at all, and we'll continue to look at the market on a regular basis." Wilson also said that there are other options, citing whole loan sales and pledging a mortgage as collateral for a loan -- known as hypothecation. "You can do a lot of different things to get liquidity out of a portfolio like that," Wilson said. "Some are more effective than others, some are easier to executive than others. They still require somebody on the other side who wants to buy the collateral or use the collateral as a good backstop for the money that they're lending." Wyndham's stock has lost nearly 50 percent this year, hitting a low of $14.62 in mid-July, due in part to concerns about its timeshare business. The Aberdeen, S.D.-based company's shares dropped $1.31, or 7.6 percent, to $15.83 on Monday. Wilson said Wyndham is focused on educating the public about the value of its timeshare business. But she said the company would not rule out alternative ownership structures for the segment if shareholder value continues to sink. She said growing Wyndham's hotel business, particularly internationally, will also help balance. Wilson said customers continue to buy timeshares, despite the struggling economy, though "they have to be coaxed a little bit." "We don't think we're immune or completely disconnected with the economy," she said. Wilson said the company's fee-based timeshare exchange business is "very, very attractive" in the current economy because timeshare owners are simply taking advantage of property they have already purchased.