Realogy upsizes debt offering to $550M

Brokerage giant will use proceeds to pay off existing debt

TRD NATIONAL /
Jun.June 10, 2020 01:53 PM
Realogy CEO Ryan Schneider 

Realogy CEO Ryan Schneider

Realogy Holdings just raised $550 million, bolstered by strong demand for a previously-announced debt offering.

The brokerage giant announced a $400 million offering of second lien notes on Monday; it upsized that offering on Wednesday based on “improved market conditions” and “strong demand,” a spokesperson said.

The upsizing is a vote of confidence from institutional investors — both in Realogy’s response to Covid-19 and long-term prospects for the housing industry. The parent company of the Corcoran Group and Coldwell Banker made strategic cuts over the past three months.

At midday, Realogy stock was trading at $8 per share, up from a historic low of $2.29 per share on March 18.

In a regulatory filing, Realogy said it plans to use the net proceeds to redeem outstanding debt.

Real estate firms have been raising billions of dollars in debt in the wake of the pandemic. CoStar and Zillow are each raising more than $1 billion.

Realogy’s offering follows its failed deal to sell its relocation business, Cartus, for $400 million. The deal was announced in November. At the time, Realogy said it would use proceeds of the sale to pay down $3.5 billion in total corporate debt.

The conglomerate is currently embroiled in a lawsuit with would-be buyer Madison Dearborn Partners (and its portfolio company SIRVA Worldwide) to enforce the contract. In court documents, Realogy said the buyer used the pandemic to make “false claims” and back out of the deal. Madison Dearborn alleged Realogy’s finances (and the threat of insolvency) nullified the deal terms.


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