S&P ups Realogy notes

S&P said it raised its issue-level rating on Realogy Group LLC’s second-lien secured notes due 2025 to B+ from B and revised the recovery rating to 3 from 5. The 3 recovery rating indicates an average (50%-70%; rounded estimate: 55%) recovery for the noteholders in default.

“The rating action reflects our assumption that the company plans to issue a $200 million add-on to its existing 5¾% senior unsecured notes due 2029, which it will use the proceeds from to repay its outstanding first-lien secured term loan,” the agency said in a press release.

“The transaction does not affect our B+ long-term issuer credit rating or stable outlook on Realogy. We believe the company will continue to benefit from stable housing demand in 2021, leading it to sustain debt leverage in the 5x area while generating good free cash flow to support its strong liquidity position,” S&P said.

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