Realogy sets Thursday launch for $4.27 billion credit facility

By Sara Rosenberg

New York, Feb. 27 - Realogy Corp. has scheduled a bank meeting for Thursday to launch its proposed $4.27 billion senior secured credit facility, according to a market source.

JPMorgan, Credit Suisse, Bear Stearns and Citigroup are the bookrunners on the deal, with JPMorgan and Credit Suisse the joint lead arrangers.

The facility consists of a $2.67 billion term loan, including an up to $1.22 billion delayed-draw piece, an $850 million synthetic letter-of-credit facility and a $750 million revolving credit facility, according to filings with the Securities and Exchange Commission.

Price talk on the facility is in the Libor plus 225 basis points area, the source said.

Proceeds from the credit facility will be used to help fund the leveraged buyout of the company by Apollo Management, LP in a transaction valued at about $9 billion, including the assumption or repayment of $1.6 billion of net debt and legacy contingent and other liabilities of about $750 million.

The delayed-draw tranche will be available to fund purchases of the company's 6.15% senior notes due 2011, 6.50% senior notes due 2016 and floating-rate senior notes due 2009 that may be put upon a change of control and ratings downgrade to non-investment grade.

The principal amount of the delayed-draw tranche will be determined at closing to reflect the remaining total principal amount of the existing senior notes after any tender offer, redemption or discharge that may be done prior to closing.

The company also plans to issue $3.65 billion in high-yield notes comprised of a $2 billion senior unsecured notes offering, a $750 million senior unsecured pay-in-kind toggle notes offering and a $900 million senior subordinated notes offering.

Realogy has received commitments for a $2.75 billion senior unsecured increasing-rate bridge loan and a $900 million senior subordinated increasing-rate bridge loan as a back up for the bonds.

There is also a commitment for a $1.062 billion receivables securitization facility in case the company's existing receivables securitization cannot be amended and continued.

Other LBO financing will come from a $1.99 billion equity commitment.

Realogy is a Parsippany, N.J., real estate franchisor.

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