Realogy seeks $325 million incremental second-lien loan via JPMorgan

By Sara Rosenberg

New York, Sept. 24 - Realogy Corp. is looking to syndicate a $325 million incremental second-lien term loan (C), according to an 8-K filed with the Securities and Exchange Commission on Thursday.

JPMorgan is the lead arranger on the deal.

Proceeds will be used to refinance a portion of the company's existing bank debt.

If the second-lien loan or an alternate second-lien transaction is successfully completed, Icahn Partners LP has agreed to exchange about 70% of the $311 million of 11%/11.75% Realogy senior toggle notes due 2014 held by it for $150 million of new second-lien term loan debt.

The $150 million second-lien loan would be in addition to the $325 million second-lien loan and would carry the same terms.

Additionally, concurrently with the exchange, Icahn Partners has agreed to sell the balance of the senior toggle notes held by it for cash to Apollo Management LP and participate as a lender in the $325 million second-lien loan.

Realogy has also recently been engaged in confidential discussions with certain institutional holders of its 10.5% senior notes due 2014, 11%/11.75% senior toggle notes due 2014 and 12.375% senior subordinated notes due 2015 regarding a potential exchange of the notes for equity and new debt.

The purpose of these transactions is to increase the company's long-term liquidity and financial flexibility as well as reduce its debt.

Based upon the company's current financial forecast and additional equity available from its sponsor through Dec. 31 as well as the ability to repay bank borrowings with the proceeds of additional second-lien or other debt, the company expects to remain in compliance with the senior secured leverage ratio under its credit facility at Sept. 30.

Realogy is a Parsippany, N.J.-based provider of real estate and relocation services.

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