The bank debt of Wyndham International dropped from the low 80s--with a $2 million piece of its "B" term loan trading at 73--following the company's announcement that it would revise its EBIDTA guidance for the third quarter downward from $82-87 million to $60 million. The market for the name was wide last week, with offers sinking to 76 and bids falling into the high 60s by Thursday evening. Traders said there were likely be more buyers than sellers at those levels, while others noted that the revision was expected.
The company attributed the revision to a sluggish business travel environment. Although Wyndham's revenue per available room increased year-over-year in the third quarter, Wyndham CEOFred Kleisner said in a written statement, "Market share gains have not compensated for the overall slowdown in travel demand."
At the end of September, the bank debt received a boost from the announcement that Wyndham would sell 13 of its properties toWestbrook Hotel Partners IV for $447 million. About $240 million of the proceeds from the sale are earmarked to pay down the company's increasing-rate loan, its term loans and its revolver on a pro-rata basis (LMW, 9/30). Rick Smith, cfo, said future asset sales would continue to be used to pay down debt, but he could not comment on whether Wyndham had any divestiture plans at this time. He added that the company would disclose more information during its earnings call on Nov. 12.