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Hotelier Wyndham Worldwide Corporation (WYN - Analyst Report) announced the completion of a $1.5 billion credit agreement yesterday. The new credit facility replaces Wyndham’s existing line of credit worth $1 billion to lower interest costs.

Besides paying down the company’s high-cost debt, the new credit facility will extend the maturity period of the debt. The new credit facility will mature in Jul 2018 while the existing line of credit was scheduled to expire in Jul 2016.

The company believes that the new credit facility will strengthen its financial position. However, Wyndham’s overall debt balance will remain unchanged following the transaction.

The company’s long-term debt was $2.7 billion as of Mar 31, 2013. At the end of the first quarter of 2013, the debt level was $360 million higher than 2012 levels. The leverage ratio was also above Wyndham’s expected range. However, management expects the leverage position to revert to its targeted range over the rest of the year with growing EBITDA.

Free cash flow in the recently-concluded first-quarter 2013 was $1.69 per share compared with $1.31 per share in the comparable period of last year. Wyndham is capable of generating attractive free cash flow. Management intends to generate $750 million in free cash flow in 2013 which is higher than the prior-year level.

Wyndham currently carries a Zacks Rank #3 (Hold). Other players in the leisure and recreational industry, which look attractive at current levels, include Life Time Fitness Inc. (LTM - Snapshot Report) and The Madison Square Garden Company (MSG - Snapshot Report), both carrying a Zacks Rank #2 (Buy). Another company, which sells recreational products, Sturm, Ruger & Co. Inc.  (RGR - Snapshot Report), can also be considered as it carries a Zacks Rank #1 (Strong Buy).

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