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Debt Do-Over at Realogy

Real estate brokerage extends maturities on most of its $6.6 bln of debt. (Realogy CFO Tony Hull)

By John Hintze | Updated on June 29, 2011
When a company’s bond prices plummet to single-digit cents on the dollar in the secondary market, it tends to indicate a bankruptcy is imminent. In early 2009, residential real estate brokerage leader Realogy Corp.’s bond prices would have led many investors to that conclusion, a situation compounded by the fact that residential real estate—Realogy’s bread and butter—was falling off a cliff.

Two years later, however, the company, which had $4.1 billion in 2010 revenue and owns such brands as Coldwell Banker, Century 21 and ERA, persuaded its lenders to participate in a massive restructuring that extended maturities on most of its debt and prepped the company—and its stakeholders—for a housing market recovery. Realogy’s bonds are now trading at or above par.

In the first quarter of 2009, the credit markets were frozen and companies much larger th,an Realogy had declared bankruptcy, so there was plenty of panic impacting bond prices. Nevertheless, Realogy’s owner, the deep-pocketed leveraged buyout firm Apollo Management, stated its full support for the company.

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