Realogy Corp. offering swap for new loans (AP)
Saturday, November 15th, 2008Realogy Corp., owner of Century 21 and Coldwell Banker, is offering to swap securities in return for new loans in a move to reduce debt by around $600 million and fight off potential default risk amid a troubled housing market, a regulatory filing showed.
Realogy is offering bonds at a discounted rate in return for about $500 million in new loans, according to a Securities and Exchange Commission filing Thursday.
Should all eligible noteholders agree to the debt exchange, the deal could lower the company’s debt by about $592 million, the filing showed.
At the end of September, Realogy had total long term debt of $6.49 billion.
The Parsippany, N.J.-based company said falling home prices and sales are challenges moving into next year.
Realogy warned, “…there can be no assurance that we will not violate this or other covenants under our senior secured credit facility or that this will not result in a default under our indentures.”
“In addition, we cannot predict how long the current volatility in the financial marketplace, decline in consumer confidence and current recessionary conditions will continue to affect home sales and prices,” said the company, which is owned by affiliates of Apollo Management, a private equity firm.
The deal was extended to eligible holders of each of its 10.5 percent senior notes due 2014; its 11 percent/11.75 percent senior toggle notes due 2014; and its 12.375 percent senior subordinated notes due 2015.
