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Realogy Completes Refinancing of Senior Secured Credit Facility

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Realogy Holdings Corp. a global leader in real estate franchising and provider of real estate brokerage, relocation and settlement services, recently announced the completion of the previously announced refinancing of the senior secured credit facility for Realogy Group LLC, an indirect, wholly owned subsidiary.

According to the company, Realogy used the proceeds from its new term loan and revolving credit facilities to pay off the outstanding borrowings under its previous term loan and revolving credit facilities.

“We are pleased that we were able to refinance our senior secured credit facility and extend the maturity dates for our term loan and revolver to 2020 and 2018, respectively,” says Anthony E. Hull, Realogy’s executive vice president, chief financial officer and treasurer. “The new facility provides Realogy with $210 million of additional liquidity before fees and expenses related to the transaction as well as added flexibility to use our future free cash flow to retire our high coupon debt more quickly.”

Specifically, Realogy’s refinanced term loan facility is comprised of $1.920 billion aggregate principal amount term loan with a maturity date of March 2020. This represents a $98 million increase and a four-year extension on the maturity date from its previous term loan facility. The interest payable on the new term loan facility is LIBOR plus 3.50 percent with a 1 percent LIBOR floor, and lenders purchased the debt at 99 percent of par.

Also as part of this transaction, Realogy entered into a new revolving credit facility with a capacity of up to $475 million aggregate principal amount and a maturity date of March 2018. This represents a $112 million increase in capacity and a two-year extension on the maturity date from its previous revolving credit facility. Borrowings under the new revolving credit facility will bear interest at a rate of LIBOR plus 2.75 percent.

“We intend to use our remaining IPO proceeds of approximately $220 million and our free cash flow, which we expect to be significantly improved beginning in 2013, to retire our most expensive debt over the next several years, beginning with our subordinated debt this April,” says Hull. “We will continue to analyze and optimize our capital structure in order to reach our goal of becoming investment grade.”

Accordingly, Realogy announced that it will redeem all of the approximately $189.6 million aggregate principal amount 12.375 percent Senior Subordinated Notes due 2015 and all of the approximately $10.3 million aggregate principal amount 13.375 percent Senior Subordinated Notes due 2018 (collectively, the “Senior Subordinated Notes”) with net proceeds remaining from the Realogy Holdings October 2012 initial public offering. The redemption will occur on April 16, 2013, at a redemption price, payable in cash, equal to 100 percent of the principal amount of the 12.375 percent Senior Subordinated Notes due 2015 and 106.688 percent of the principal amount of the 13.375 percent Senior Subordinated Notes due 2018, to be redeemed, together with accrued and unpaid interest, if any, to, but excluding, the redemption date.

After giving effect to the completion of this refinancing transaction and the April 2013 redemption of the Subordinated Notes, Realogy will not have any corporate debt maturities prior to April 2017.

For more information, visit www.realogy.com.

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