Realogy is seeking $400 million in capital through a senior note offering — essentially short-term bonds, which the real estate holding company would pay out in 2029, the company announced Wednesday.
The percentage rate at which Realogy is offering the bonds is yet to be revealed, but the offering comes at a time when the housing market is soaring, the company revealed in a separate filing.
According to a filing with the U.S. Securities and Exchange Commission, Realogy intends to use portions of the offering to, “repay a portion of the outstanding borrowings under its term loan A credit facility and apply the remaining net proceeds to repay a portion of the outstanding borrowings under its term loan B credit facility.”
The company’s debt has long been a point of discussion from analysts, but in an interview last month Realogy CEO Ryan Schneider assured Inman that the company’s debt would not hold Realogy back.
“Nothing stops us from investing in our business,” Schneider said. “We have never let [debt] and will not let that get in the way of investing in and for our agents and franchisees.”
The senior notes offering is Realogy’s second offering in less than a year. In June, the company announced a $550 million offering of second lien notes, the proceeds of which were used to redeem senior notes that were due in 2021.
The offering also comes at a time when the housing market is blazing. In the filing, Realogy included some unaudited housing market results that, for the first time, gives insight into the full-year results of 2020.
Even with the housing market going into lockdown in early spring, Realogy expects closed transaction volume will finish 2020 up 13 percent from the year prior. The fourth quarter alone saw closed transaction volume soar 44 percent ahead of 2019’s pace.
In December alone, closed transactions are expected to be 47 percent ahead of where they were in 2019. Open transactions — where a contract is signed and closing is underway — are expected to be up 49 percent year over year in December, a signal that the hot market is not yet cooling.