RISMEDIA, December 2, 2010—Realogy Corporation announced that it commenced offers to exchange on November 30, 2010 with respect to its outstanding 10.50% Senior Notes due 2014, its outstanding 11.00%/11.75% Senior Toggle Notes due 2014 and its outstanding 12.375% Senior Subordinated Notes due 2015. The purpose of the Exchange Offers and Consent Solicitations is to provide the company with a more flexible capital structure through the extension of maturities of its Existing Notes and by giving Eligible Holders who receive Convertible Notes the ability to exchange debt for equity in the future.
The Exchange Offers are open only to “qualified institutional buyers” and institutional “accredited investors” as such terms are defined under the Securities Act of 1933, as amended (the “Securities Act”) (such eligible participants are referred to herein as “Eligible Holders”).
Concurrently with the Exchange Offers, Realogy is soliciting consents from Eligible Holders to certain amendments to the indentures governing the Existing Notes to remove substantially all of the restrictive covenants and certain of the default provisions in the Existing Notes Indentures. Eligible Holders tendering Existing Notes in the Exchange Offers must also deliver consents to the Proposed Amendments with respect to such Existing Notes. Approval of the Proposed Amendments requires the consent of holders of at least a majority of the aggregate outstanding principal amount of each series of Existing Notes, not including Existing Notes held by affiliates of Realogy. The consummation of the Exchange Offers is not conditioned upon the receipt of the requisite consents to approve the Proposed Amendments, and Realogy may consummate the Exchange Offers without receiving the requisite consents with respect to one or more series of Existing Notes.
Eligible Holders that validly tender, and do not withdraw, their Existing Notes at or prior to 5:00 p.m., New York City time, on December 13, 2010 (as it may be extended, the “Consent Time”), will be eligible to receive the total consideration of, at the election of such Eligible Holder and subject to the Convertible Notes Limit and any resulting Proration $1,000 principal amount of New 11.50% Senior Cash Notes due 2017 or $1,000 principal amount of Series A Convertible Notes for each $1,000 principal amount of Existing Senior Cash Notes, $1,000 principal amount of New 12.00% Senior Cash Notes due 2017 or $1,000 principal amount of Series B Convertible Notes for each $1,000 principal amount of Existing Senior Toggle Notes and/or $1,000 principal amount of New 13.375% Senior Subordinated Notes due 2018 or $1,000 principal amount of Series C Convertible Notes for each $1,000 principal amount of Existing Senior Subordinated Notes.
An Eligible Holder that validly tenders its Existing Notes in the Exchange Offers will be deemed to have delivered a consent with respect to such tendered Existing Notes pursuant to the Consent Solicitations. Tendered Existing Notes may not be withdrawn after the Consent Time.
The Exchange Offers and Consent Solicitations are scheduled to expire at 5:00 p.m., New York City time, on December 29, 2010 (as it may be extended or earlier terminated, the “Expiration Time”). Eligible Holders that validly tender their Existing Notes and deliver their consents after the Consent Time but at or prior to the Expiration Time will be eligible to receive only the exchange consideration of, at the election of such Eligible Holder and subject to the Convertible Notes Limit and any resulting Proration, $950 principal amount of New 11.50% Senior Cash Notes or $950 principal amount of Series A Convertible Notes for each $1,000 principal amount of Existing Senior Cash Notes, $950 principal amount of New 12.00% Senior Cash Notes or $950 principal amount of Series B Convertible Notes for each $1,000 principal amount of Existing Senior Toggle Notes and/or $950 principal amount of New Senior Subordinated Notes or $950 principal amount of Series C Convertible Notes for each $1,000 principal amount of Existing Senior Subordinated Notes.
Prior to the settlement date for the Exchange Offers, Domus Holdings Corp., a Delaware corporation and the indirect parent of Realogy will amend and restate its certificate of incorporation to reclassify all of its existing common stock into Class A Common Stock, par value $0.01 per share and Class B Common Stock, par value $0.01 per share. Shares of Class B Common Stock will have five votes per share and shares of Class A Common Stock will have one vote per share. The Convertible Notes will be convertible at any time at the option of the holders thereof, in whole or in part, into shares of Class A Common Stock at a conversion rate of 975.6098 shares of Class A Common Stock per $1,000 principal amount of Series A Convertible Notes and Series B Convertible Notes and 926.7841 shares of Class A Common Stock per $1,000 principal amount of Series C Convertible Notes.
The maximum aggregate principal amount of Existing Notes that may be tendered for Convertible Notes in the Exchange Offers is $2.2 billion. In the event that the aggregate principal amount of Existing Notes tendered for Convertible Notes exceeds the Convertible Notes Limit, Convertible Notes will only be issued in exchange for Existing Notes up to the Convertible Notes Limit and will be apportioned pro rata among all tendering eligible holders, to the extent they elected to receive Convertible Notes, based on the principal amount of Existing Notes tendered for Convertible Notes by such eligible holders. In the event of Proration, eligible holders that have elected to receive Convertible Notes will receive New 11.50% Senior Cash Notes, New 12.00% Senior Cash Notes or New Senior Subordinated Notes, as the case may be, for the portion of their corresponding tendered Existing Notes for which they will not receive Convertible Notes.
An amount equal to the accrued and unpaid interest on each series of Existing Notes tendered in the Exchange Offers until, but not including, the settlement date for the Exchange Offers, will be paid to holders of record of the New Notes on the record date preceding the first interest payment date of the applicable series of New Notes in accordance with the terms of such New Notes.
On November 30, 2010, Paulson & Co. Inc., on behalf of the several investment funds and accounts managed by it (together with such investment funds and accounts, “Paulson”), Avenue Capital Management II, L.P. (together with its affiliated funds, “Avenue”) and investment funds managed by Apollo Management VI, L.P. or one of its affiliates (together with its affiliates, “Apollo”), which collectively held as of such date approximately $1.95 billion aggregate principal amount of the Existing Notes, representing approximately 64% of the aggregate outstanding principal amount of the Existing Notes, entered into a support agreement with Realogy and Holdings. Pursuant to the Support Agreement, Paulson and Apollo agreed to tender in the Exchange Offers all of their Existing Notes, plus any additional Existing Notes acquired by them through the Expiration Time, in exchange for Convertible Notes and Avenue agreed to tender in the Exchange Offers approximately $250 million principal amount of its Existing Notes for Extended Maturity Notes and the remaining approximately $64 million principal amount of its Existing Notes for Convertible Notes, plus any additional Existing Notes acquired by Avenue through the Expiration Time, for either Convertible Notes or Extended Maturity Notes, at Avenue’s option. The consummation of the Exchange Offers and the obligations of Paulson, Avenue and Apollo to tender their Existing Notes in the Exchange Offers are subject to certain terms and conditions set forth in the Support Agreement.
Consummation of the Exchange Offers and Consent Solicitations is conditioned upon the satisfaction or waiver of the conditions set forth in the Offering Memorandum and the Letter of Transmittal. Such conditions include, among other things, the valid tender and acceptance by us of at least $2.65 billion aggregate principal amount of Existing Notes in the Exchange Offers, and the company’s receipt of all material regulatory approvals from any governmental authority in connection with the Exchange Offers. Subject to the terms and conditions set forth in the Offering Memorandum and the Support Agreement, Realogy may waive any of these or any other conditions to the consummation of the Exchange Offers and Consent Solicitations in its sole discretion.
The Exchange Offers and Consent Solicitations are being made solely to Eligible Holders upon the terms and subject to the conditions set forth in the confidential Offering Memorandum and the related letter of transmittal and consent, both dated November 30, 2010. Only holders who certify to their status as “qualified institutional buyers” or institutional “accredited investors” as defined under the Securities Act and are Eligible Holders may receive copies of the Offering Memorandum and Letter of Transmittal and participate in the Exchange Offers. Holders wishing to certify that they are Eligible Holders and be eligible to receive a copy of the Offering Memorandum and Letter of Transmittal, should visit the eligibility website, www.bondcom.com/realogy, or contact the Information and Exchange Agent for the Exchange Offers, Bondholder Communications Group, LLC at 212-809-2663.
For more information, visit www.realogy.com.
