Realogy up with numbers; LyondellBasell better on creditor agreement; Chaparral delays revolver

By Sara Rosenberg

New York, Feb. 16 - Realogy Corp.'s strip of institutional bank debt headed higher during Tuesday's trading session following the release of fourth-quarter numbers that showed a year-over-year improvement in earnings, revenues and EBITDA.

In more trading news, LyondellBasell's pre-petition CAM strengthened on the back of the company's announcement that an agreement has been reached with the unsecured creditor's committee, clearing the way for its emergence from Chapter 11.

Meanwhile, over in the primary market, Chaparral Energy Inc. has postponed plans to get a new revolving credit facility as a result of its bond offering being pulled, and Pierre Foods Inc. began floating price talk on its proposed term loan.

Realogy rises on earnings

Realogy's strip of term loan and letter-of-credit facility debt gained some ground in trading after the company came out with fourth-quarter results, according to a trader.

The strip of bank debt was quoted at 87 bid, 89 offered, up from 86¾ bid, 88¾ offered, the trader said.

For the fourth quarter, Realogy reported a net loss of $46 million versus a net loss of $1.703 billion in the prior year. The loss before income taxes and minority interest for the fourth quarter of 2008 included an impairment charge of $1.789 billion.

Revenues for the quarter were $1.048 billion, compared to $944 million in the fourth quarter of 2008.

Realogy EBITDA rises

Realogy's EBITDA for the fourth quarter was $89 million, or $104 million before restructuring and other items. This was an increase of $70 million year over year, which the company said was primarily a result of executed cost efficiencies.

"The macroeconomic challenges of the past two years have been unprecedented, and our business model has proven its resiliency throughout," said Richard A. Smith, president and chief executive officer, in a news release.

"EBITDA before restructuring and other items has remained essentially flat during 2008 and 2009 despite substantial revenue declines we have experienced since 2007. The resulting increased efficiency of our operations has positioned us to outperform when the recovery occurs," Smith added.

Realogy complies with covenants

Realogy also pointed out in its earnings release on Tuesday that as of Dec. 31, its senior secured leverage ratio was 4.66 to 1, which is below the 5.0 to 1 maximum ratio required to be in compliance with its credit facility.

The company's senior secured net debt at year-end was $2.89 billion.

In addition, as of Dec. 31, the company had $219 million of readily available cash and no outstanding balance on its revolving credit facility.

Realogy is a Parsippany, N.J.-based provider of real estate and relocation services.

LyondellBasell trades higher

LyondellBasell's pre-petition CAM was better in the secondary market as the company revealed that an agreement has been reached with the unsecured creditor's committee regarding the settlement of claims against the parties who financed the 2007 leveraged buyout of Lyondell by Basell, according to traders.

As a result of the agreement, the company expects that it will be able to complete approval of its disclosure statement and plan of reorganization soon.

However, the proposed agreement with the creditors is still subject to court approval, final internal approval and final documentation.

Following the news, LyondellBasell's CAM was quoted by one trader at 67½ bid, 68¼ offered, up from 65½ bid, 66½ offered, and by a second trader at 66 bid, 68 offered, up from 65½ bid, 67½ offered.

LyondellBasell increasing distribution

Under the proposed agreement, LyondellBasell will distribute $450 million to the holders of general unsecured claims, the millennium bonds and 2015 notes, up from $300 million.

The additional $150 million will be paid in the form of reorganized equity, which will be funded by a reduction in distributions to the holders of senior secured credit facility and bridge loan claims.

The unsecured creditor's committee, substantial holders of the company's senior debt and bridge debt and the 2015 notes trustee have all agreed to support the proposed plan.

LyondellBasell is a Netherlands-based polymers, petrochemicals and fuels companies.

Chaparral postpones revolver

Switching to new deal happenings, completion of Chaparral Energy's $400 million senior secured reserve-based revolving credit facility has been pushed off, according to a market source.

The source went on to explain that the revolver delay is because the company opted to postpone its $400 million senior notes offering, and the notes were put on the back burner as a result of market conditions.

Closing on the notes was conditioned on closing on the revolver and vice versa, the source continued.

Chaparral lead banks

UBS, Credit Suisse and RBS were acting as the joint bookrunners on Chaparral Energy's revolver that was expected to have an initial borrowing base of $300 million.

This was not a marketed deal, but rather was being done only among the banks.

Proceeds from the revolver, along with cash on hand and the senior notes, were going to be used to repay the company's existing credit facility and for general corporate purposes.

Chaparral is an Oklahoma City-based independent oil and natural gas production and exploitation company.

Pierre Foods sets talk

Pierre Foods began circulating price talk on its $260 million to $265 million term loan as the deal is gearing up to launch to investors with a bank meeting on Thursday, according to a market source.

The term loan is being talked in the Libor plus 500 basis points context with a 2% Libor floor and an original issue discount of 99, the source said.

Deutsche Bank is the lead bank on the deal that will be used to refinance an existing term loan and fund a dividend.

Pierre Foods is a Cincinnati, Ohio-based producer of fully cooked beef, pork, chicken, turkey, peanut butter and bakery products for school, foodservice, retail, vending and convenience store markets.

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