Moody’s assigns Realogy notes B3

Moody’s Investors Service said it assigned a B3 rating to Realogy Group LLC’s proposed senior secured second-lien notes due 2025.

The company plans to use the proceeds to call a portion of its 5¼% notes due 2021.

“Realogy’s plan to call a portion of its 5¼% notes due 2021 with the net proceeds of its proposed second-lien notes due 2025 greatly reduces its near-term refinancing risk, and is, therefore, a positive liquidity development,” said Edmond DeForest, a Moody’s vice president and senior credit officer, in a press release.

“That said, assuming the proposed second lien notes have a coupon well in excess of 5.25%, the transaction will weaken interest coverage and free cash flow, and so it is also a negative credit development,” DeForest said.

Moody’s also affirmed the company’s B2 rating, the Ba3 senior secured first-lien bank facility rating and Caa1 senior unsecured notes rating.

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