Realogy greenshoe boosts 0.25% exchangeable notes to $402.5 million

By Rebecca Melvin

Concord, N.H., June 3 – The underwriters of Realogy Holdings Corp.’s recent offering of 0.25% exchangeable notes due 2026 exercised their $52.5 million over-allotment option in full, bringing the total issue size to $402.5 million, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, Realogy priced an upsized $350 million of five-year exchangeable notes after the market close on May 28 at the rich end of talk with a coupon of 0.25% and an initial exchange premium of 40%.

Price talk was for a coupon of 0.25% to 0.75% and an initial exchange premium of 35% to 40%.

The notes will be issued by Realogy Group LLC and exchangeable for Realogy Holdings’ shares.

J.P. Morgan Securities LLC (lead left), BofA Securities Inc. and Goldman Sachs & Co. LLC are joint bookrunners for the Rule 144A offering.

Prior to pricing, the initial size of the offering had been expected to be $300 million with a greenshoe of $45 million.

The notes are non-callable until June 20, 2024 and then subject to a 130% hurdle.

They are putable upon a fundamental change. There is dividend protection.

The notes will be settled in cash up to their principal amount with the remaining to be settled in cash, shares or a combination of both at the company’s option.

In connection with the offering, the company entered into convertible note hedge and warrant transactions.

The strike price on the warrant transactions is $30.6075, which represents a premium of 75% over the closing price of stock on May 27.

Proceeds will be used to cover the cost of the call spread and for general corporate purposes.

Realogy is a Madison, N.J.-based integrated residential real estate services provider, which includes brokerage, relocation, title and settlement businesses and a mortgage joint venture.

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