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Realogy seeks to lower loan costs as housing recovers

Realogy Holdings Corp., the most indebted U.S. real-estate services company, will seek to negotiate a lower interest rate on its most senior debt obligations next year.

The firm is planning to reduce how much it pays on a $1.9 billion term loan that it repriced in February, according to Anthony Hull, the chief financial officer. It currently pays 3.5 percentage points more than the London interbank offered rate, with a 1 percent floor on Libor, according to data compiled by Bloomberg.

A recovery in the housing market, which has led to Realogy’s first profitable quarter in three years, will allow the Madison, N.J.-based company to continue cutting its debt costs, Hull said in a July 24 telephone interview. Realogy has decreased its total interest expense to $255 million from $672 million a year ago, he said.

“We can reprice our term loan next March, so we’d probably look at that opportunity to reduce our overall interest costs at that point,” Hull said.

Home sales

New home sales rose 8.3 percent to an annualized pace of 497,000 in June, the highest level since May 2008, the Commerce Department said July 24. Existing home sales fell 1.2 percent in June to a 5.08 million annualized rate, a level 15.2 percent higher than a year ago, the National Association of Realtors reported July 22.

Realogy’s net income rose to $84 million in the three months ended June 30, the first time it has reported a profit since the second quarter of 2010, Bloomberg data show. The real-estate brokerage raised $1.08 billion in an initial public offering in October, using the proceeds to help reduce debt.

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