Realogy details $435 million term loan A priced at Libor plus 225 bps

By Marisa Wong

Morgantown, W.Va., Oct. 28 – Realogy Group LLC, an indirect wholly owned subsidiary of Realogy Holdings Corp., disclosed details of its new $435 million term loan A facility in an 8-K filed Wednesday with the Securities and Exchange Commission.

On Oct. 23 Realogy refinanced its debt by amending and increasing its existing five-year revolving credit facility to $815 million and entering into the new five-year term loan A.

Proceeds from the term loan A and revolver borrowings were used to discharge the company’s $593 million of 7 5/8% senior secured first-lien notes due 2020.

Realogy’s existing term loan B remains unchanged, the filing noted.

Term loan A

Realogy entered into the new term loan A senior secured credit agreement with JPMorgan Chase Bank, NA as administrative agent. J.P. Morgan Securities LLC, Barclays Bank plc, BMO Capital Markets Corp., Citigroup Global Markets Inc., Credit Agricole Corporate and Investment Bank, Goldman Sachs Lending Partners LLC and Suntrust Robinson Humphrey, Inc. acted as joint lead arrangers and joint bookrunners.

The term loan A facility was issued at par with a maturity date of Oct. 23, 2020.

If the company’s term loan B is not repaid in full prior to Dec. 5, 2019 or the maturity date of the term loan B has not been extended to a date not earlier than Jan. 22, 2021, the maturity date of the term loan A will be Dec. 5, 2019.

Interest is equal to Libor plus 225 basis points, subject to adjustment based on the company’s senior secured leverage ratio. The applicable margin ranges from 200 bps to 250 bps.

The term loan A agreement allows the company to obtain up to $500 million of additional credit facilities without the consent of existing lenders plus an unlimited amount if its senior secured leverage ratio is less than 3.50 to 1.00 on a pro forma basis.

The company may also issue senior secured or unsecured notes in lieu of any incremental facility.

The term loan A facility provides for quarterly amortization payments, beginning March 31, 2016.

In addition, the agreement requires the company to maintain a maximum senior secured leverage ratio of 4.75 to 1.00 tested on a quarterly basis. The maximum senior secured leverage ratio is increased to 5.25 to 1.00 for two consecutive fiscal quarters ended immediately following the closing of a material acquisition (with consideration or assumption of debt in excess of $250 million). However, prior to that ratio again increasing due to a subsequent material acquisition, there must be at least two consecutive fiscal quarters for which the leverage ratio maximum was 4.75 to 1.00.

Revolver amendment

Realogy entered into a second amendment to its amended and restated credit agreement dated March 5, 2013 with JPMorgan Chase Bank, NA as administrative agent for a new $815 million five-year revolver that refinances and replaces its prior $475 million revolver.

The facility includes a $125 million letter-of-credit sub-facility.

The revolver matures on Oct. 23, 2020.

Like the term loan A, the revolver will mature on Dec. 5, 2019 instead if the company’s term loan B is not repaid in full by that time.

Interest is equal to Libor plus 225 bps, subject to adjustment based on the company’s senior secured leverage ratio. The applicable margin ranges from 200 bps to 250 bps.

The company must also pay a commitment fee initially equal to 40 bps. The fee generally ranges from 35 bps to 45 bps, depending on the senior secured leverage ratio.

The amended revolver has similar financial covenants to those of the new term loan A.

The real estate company is based in Madison, N.J.

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