By Paul A. Harris
Portland, Ore., Jan. 6 – Realogy Holdings Corp. priced an upsized $600 million issue of eight-year senior notes (Caa1/B-) at par to yield 5¾% in a Wednesday drive-by, according to market sources.
The issue size increased from $400 million.
The yield printed at the tight end of the downwardly revised 5¾% to 5 7/8% yield talk. Earlier official talk was in the 6% area. Initial guidance had the deal coming to yield in the low-to-mid 6% area.
In spite of the cascading price talk and the upsize, the market remained notably warm to the deal, a trader said, adding that it was heard to be eight-times oversubscribed at 3 p.m. ET on Wednesday.
Part of its luster had to do with the fact that if the Madison N.J.-based provider of residential real estate services is able to reduce its leverage by half a turn, Moody's said it will promote its senior unsecured credit rating to B3 from Caa1, the trader remarked, adding that the perception in the market is that the Moody's improvement will ultimately materialize.
J.P. Morgan Securities LLC was at the left of a syndicate of bookrunners that also included Barclays, BofA Securities Inc., Capital One Securities Inc., Citizens Capital Markets Inc., Credit Agricole CIB, Truist Securities Inc., BMO Capital Markets Corp., Santander Investment Securities Inc., TD Securities (USA) LLC and Goldman Sachs & Co. LLC.
The notes were issued via Realogy Group LLC and Realogy Co-Issuer Corp.
Realogy plans to use about $250 million of the net proceeds pay down its term loan A, with the remaining proceeds to pay down its term loan B.
In a press release the company stated that the allocation of proceeds is subject to change, with a portion possibly being used to repay other debt.
| Issuers: | Realogy Group LLC and Realogy Co-Issuer Corp.
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| Amount: | $600 million, increased from $400 million
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| Maturity: | Jan. 15, 2029
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| Bookrunners: | J.P. Morgan Securities LLC, Barclays, BofA Securities Inc., Capital One Securities Inc., Citizens Capital Markets Inc., Credit Agricole CIB, Truist Securities Inc., BMO Capital Markets Corp., Santander Investment Securities Inc., TD Securities (USA) LLC and Goldman Sachs & Co. LLC
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| Coupon: | 5¾%
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| Price: | Par
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| Yield: | 5¾%
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| Spread: | 493 bps
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| Call protection: | Three years
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| Trade date: | Jan. 6
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| Settlement date: | Jan. 11
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| Ratings: | Moody's: Caa1
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| S&P: B-
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| Distribution: | Rule 144A and Regulation S for life
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| Price talk: | 5¾% to 5 7/8%, revised from 6% area
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| Marketing: | Drive-by
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