How Apollo doubled its money on Realogy

Things looked dicey for a time when the housing market crashed, but Apollo Global Management LLC eventually doubled its money after taking Realogy Holdings Corp. private in April 2007, the Wall Street Journal reports.

Thousands of Realogy’s 15,000 employees lost their jobs as the company racked up more than $3 billion in losses from 2008 and 2010, Realogy’s credit rating was reduced to “junk” status, “and predictions of debt defaults and bankruptcy at Realogy” were widespread.

Apollo started the turnaround by buying up Realogy debt in 2009, sometimes for as little as 10 cents on the dollar. While some creditors took hits when selling their debt many “fared well” in debt restructurings, receiving cash, new debt and shares in the company’s initial public offering.

With the housing market rebounding, last year’s IPO allowed Apollo to gradually divest itself of its Realogy shares — it unloaded the last in July — for $1.3 billion all told.

“There was a clear expectation that it was going to go through some major restructuring or Chapter 11,” William Derrough of investment bank Moelis & Co told the Wall Street Journal. “The fact that they were able to turn it around to where there is actually equity is astonishing.” Source: wsj.com.