Realogy debt plan moves forward

Real estate franchise and brokerage company Realogy Corp. said Monday it took out $515 million in loans in a debt restructuring that will reduce the company's debt by $70 million.

Realogy was acquired by an affiliate of Apollo in April 2007 in a leveraged deal that left the company burdened with debt.

Realogy, whose franchise group includes the CENTURY 21, Coldwell Banker and ERA brands, recently reported short- and long-term debts totaling $7.31 billion as of June 30, down from $7.46 billion at the end of last year.

Realogy said Monday it plans to take out an additional $135 million in loans on Oct. 9, subject to lender commitments, for a total of $650 million in new borrowing.

Realogy said it will pay down at least $365 million of borrowings on the $750 million revolving credit facility that's part of more than $3 billion in senior secured debt. That will help the company remain within contractual debt ratios that are scheduled to tighten at the end of the month.

The company acknowledged that the debt exchange is larger in scope than the plan it announced last week. In announcing the plan, Realogy said it expects to post a third-quarter net loss of $20 million to $25 million on $1.14 billion to $1.17 billion in revenue (see story).

Part of the proceeds of the new second-lien term loans, which carry an interest rate of 13.5 percent and mature in 2017, will be used to pay down Realogy's obligations to senior creditors, the company said. ...CONTINUED

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