Realogy LBO financing to include up to $4.27 billion credit facility, $3.65 billion bonds

By Sara Rosenberg

New York, Jan. 18 - Realogy Corp. detailed its leveraged buyout financing plans including that there will be an up to $4.27 billion senior secured credit facility and the issuance of $3.65 billion in high-yield notes, according to a PREM14A filed with the Securities and Exchange Commission Thursday.

JPMorgan, Credit Suisse, Bear Stearns and Citigroup are the lead banks on the debt financing. For the credit facility, all four banks will be bookrunners, with JPMorgan and Credit Suisse joint lead arrangers.

The credit facility consists of up to $2.67 billion in term loans, an $850 million synthetic letter-of-credit facility and a $750 million revolving credit facility.

The total term loan amount includes an up to $970 million delayed-draw piece that would be available to fund purchases of the company's 6.15% senior notes due 2011, 6.50% senior notes due 2016 and floating-rate senior notes due 2009 that may be put upon a change of control and ratings downgrade to non-investment grade.

The principal amount of the delayed-draw tranche will be determined at closing to reflect the remaining total principal amount of the existing senior notes after any tender offer, redemption or discharge that may be done prior to closing.

As for the bonds, the expectation is that they will be comprised of a $2 billion senior unsecured notes offering, a $750 million senior unsecured PIK toggle notes offering and a $900 million senior subordinated notes offering.

Realogy has received commitments for a $2.75 billion senior unsecured increasing-rate bridge loan and a $900 million senior subordinated increasing-rate bridge loan as a back up for the bonds.

There is also a commitment for a $1.062 billion receivables securitization facility in case the company's existing receivables securitization cannot be amended and continued.

Other LBO financing will come from a $1.99 billion equity commitment.

Under the transaction agreement, Apollo Management, LP is buying the company in a transaction valued at about $9 billion, including the assumption or repayment of $1.6 billion of net debt and legacy contingent and other liabilities of about $750 million.

The transaction is expected to close in the spring of 2007, subject to Realogy stockholder approval, antitrust and insurance approvals and other customary closing conditions.

Realogy is a Parsippany, N.J., real estate franchisor.

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