Realogy ends talks to exchange three note series for shares, new debt

By Jennifer Chiou

New York, Sept. 25 - Realogy Corp. terminated the previously announced confidential discussions with some institutional holders of its 10½% senior notes due 2014, 11%-11¾% senior toggle notes due 2014 and 12 3/8% senior subordinated notes due 2015, according to an 8-K filing with the Securities and Exchange Commission.

The company had previously been discussing the issue of equity and new debt for the securities.

Realogy had already noted on Thursday that the exchanges would not necessarily occur.

Also on Thursday, the company entered into an agreement with Icahn Partners, LP and an affiliate of Apollo Management, LP to exchange about 70% of Realogy's $311 million of 11%-11¾% senior toggle notes.

During these discussions, Apollo advised Realogy that an affiliate of Apollo held about $875 million total of the three series of notes.

On Friday, the company said it is talking its incremental second-lien term loan (C) at a fixed rate in the 13½% area, with an original issue discount of 98. The loan was launched with a size of $325 million, but chatter is that it may be increased to $500 million, sources said.

As already reported, the privately negotiated transaction with Icahn will occur if Realogy consummates its incremental term loans transaction or an alternate second-lien term loan transaction.

In exchange for the toggle notes, Realogy will issue $150 million of new second-lien term loans under its credit facility.

Additionally, Icahn previously agreed to sell the balance of the toggle notes it holds as well as those held by its affiliates for cash to Apollo and participate as a lender in the incremental term loans transaction.

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

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