Realogy Corporation said today that it is seeking $325 million of "second-lien term loans to swap for bonds held by Icahn Partners LP and that it may exchange other debt for equity in the company," according to an article this afternoon by Pierre Paulden for Bloomberg News.
Realogy, which owns Century 21 and Coldwell Banker, has indicated it expects to report "a third-quarter net loss of $20 million to $25 million," the article stated, adding that it is "seeking to trim debt costs to avoid breaking the terms of its loans."
"Leon Black's Apollo Management LP bought the Parsippany, New Jersey-based real-estate company for $6.6 billion in April 2007 amid the worst U.S. housing slump since the 1930s," the article continued, noting that "The company's $1.7 billion of 10.5 percent notes due in 2014 rose 8.6 cents to 80.75 cents on the dollar in New York as of 2:44 P.M."
The article quoted an analyst at Standard & Poor's in New York, Emile Courtney, as stating that "They still remain highly leveraged and there is only a modest amount of debt reduction from this transaction," adding that "The real-estate cycle has been too tough on the business and they will still need to recapitalize."
The article said that "JPMorgan Chase & Co. will arrange the new 4 1/4-year loan, which also will be used to repay existing bank debt, according to a person familiar with the deal, who declined to be identified as the sale hasn't closed" and that "Icahn Partners will swap 70 percent of $311 million of so-called pay-in-kind toggle bonds due in 2014 for $150 million of the new loan."
A regulatory filing by Realogy indicated that "there can be no assurance" it will raise the debt, the article maintained.
Realogy, which owns Century 21 and Coldwell Banker, has indicated it expects to report "a third-quarter net loss of $20 million to $25 million," the article stated, adding that it is "seeking to trim debt costs to avoid breaking the terms of its loans."
"Leon Black's Apollo Management LP bought the Parsippany, New Jersey-based real-estate company for $6.6 billion in April 2007 amid the worst U.S. housing slump since the 1930s," the article continued, noting that "The company's $1.7 billion of 10.5 percent notes due in 2014 rose 8.6 cents to 80.75 cents on the dollar in New York as of 2:44 P.M."
The article quoted an analyst at Standard & Poor's in New York, Emile Courtney, as stating that "They still remain highly leveraged and there is only a modest amount of debt reduction from this transaction," adding that "The real-estate cycle has been too tough on the business and they will still need to recapitalize."
The article said that "JPMorgan Chase & Co. will arrange the new 4 1/4-year loan, which also will be used to repay existing bank debt, according to a person familiar with the deal, who declined to be identified as the sale hasn't closed" and that "Icahn Partners will swap 70 percent of $311 million of so-called pay-in-kind toggle bonds due in 2014 for $150 million of the new loan."
A regulatory filing by Realogy indicated that "there can be no assurance" it will raise the debt, the article maintained.
Architecture Critic
Carter Horsley
Since 1997, Carter B. Horsley has been the editorial director of CityRealty. He began his journalistic career at The New York Times in 1961 where he spent 26 years as a reporter specializing in real estate & architectural news. In 1987, he became the architecture critic and real estate editor of The New York Post.
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