Realogy may have to redeem portion of senior toggle notes at par

By Jennifer Chiou

New York, May 3 - Realogy Corp. may be required to redeem some of its 11%-11¾% senior toggle notes due 2014 to avoid the securities being treated as applicable high-yield discount obligations, according to a 10-Q filing with the Securities and Exchange Commission.

If the notes were treated as applicable high-yield discount obligations, the company would be subject to certain interest deduction limitations.

Assuming that Realogy continues to use the PIK interest option election through October 2011, it would be required to repay about $132 million of the notes at par plus accrued interest in April 2012, the filing said.

The portion of a senior toggle notes required to be redeemed is an amount equal to the excess of the accrued original issue discount as of the end of the accrual period, less the amount of interest paid in cash minus the first-year yield.

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

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