Realogy amends, further extends offer to issue term loans in exchange for notes

By Angela McDaniels

Tacoma, Wash., Dec. 9 - Realogy Corp. said it amended its exchange offer so that noteholders who commit by the expiration date will be required to deliver the same amount of notes in order to fund each $100,000 principal amount of term loans as participants who committed by the early commitment date.

Prior to the amendment, noteholders who committed after the early commitment date were required to deliver a higher amount of notes to fund the same amount of commitments.

The company also extended the expiration date to midnight ET on Dec. 19 from Dec. 18. It was previously extended from Dec. 11.

The closing date for the term loans is still expected to be Dec. 23, according to an 8-K filing with the Securities and Exchange Commission.

As previously reported, Realogy is offering to exchange some of its outstanding notes at a discount for up to $500 million principal amount of new second-lien incremental term loans.

The second-lien term loans will be added under the accordion feature of the company's existing credit facility, of which JPMorgan Chase Bank, NA is the administrative agent. It will mature on April 14, 2014.

Realogy will accept notes in the following order:

• First, the $850 million 12 3/8% senior subordinated notes due 2015. Holders must deliver $277,477.48 of the notes for each $100,000 principal amount of the second-lien term loan C;

• Second, the $1.7 billion of 10½% senior cash pay notes due 2014. Holders must deliver $198,709.68 of the notes for each $100,000 principal amount of the second-lien term loan C; and

• Third, the $582.2 million of 11%/11¾% of senior toggle notes due 2014. Holders must deliver $212,030.08 of the notes for each $100,000 principal amount of the second-lien term loan D.

Realogy said no more than $125 million can come from the senior subordinated notes and no more than $175 million from the toggle notes.

Each commitment must be for at least $250,000 of loans.

Under the amendment, all participating holders of 12 3/8% notes and 10½% notes will receive accrued interest. Previously, only holders who committed by the early commitment date were set to receive accrued interest.

Holders of the toggle notes will not receive accrued interest.

As of Nov. 26, the early commitment date, the company had received $237.06 million of commitments for second-lien incremental term loans. As consideration for these commitments, the company had received $181.0 million of 12 3/8% notes, $327.6 million of 10½% notes and $14.8 million of toggle notes.

The term loan D allows Realogy to make interest payments partly in kind, if it chooses.

The offer is only open to investors under Rule 144A or those outside the United States.

Litigation

As previously reported, the trustee under the toggle notes indenture, Bank of New York Mellon, and noteholder High River LP filed a complaint in the Court of Chancery on Nov. 26 seeking, among other things, declaratory relief that the offer would constitute a breach of the toggle note indenture. A hearing is set for Dec. 15.

The company has received letters making similar allegations from law firms claiming to represent holders of more than 25% of the 10½% notes and holders of a majority of the toggle notes.

The company said it believes the allegations are without merit and that it intends to vigorously defend against any steps taken to interfere with the exchange offer.

Realogy is a Parsippany, N.J., provider of real estate and relocation services.

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