Realogy draws on credit line, cuts costs to preserve cash

Mar. 25, 2020 8:01 AM ETAnywhere Real Estate Inc. (HOUS)HOUSBy: Liz Kiesche, SA News Editor
  • Realogy (NYSE:RLGY) rises 1.7% in premarket trading after disclosing that it borrowed an additional $400M under its credit line this month and took other actions to boost liquidity.
  • As of March 23, the company had ~$487M of available cash on hand.
  • Expects to be in compliance with its senior secured leverage ratio at March 31, 2020, which is the sole financial maintenance covenant under the company’s amended and restated credit agreement.
  • Implements temporary salary and work-week reductions for most of its employees, marketing and expense pullbacks, and delays for investments in certain strategic initiatives.
  • Realogy's CEO and each of  its executive officers who reports directly to him have agreed to a temporary reduction in base salary (effective April 4, 2020), including a 90% reduction for the CEO and a 50% reduction for each of his direct reports.
  • Taking some actions to improve liquidity for its franchisees, which aren't expected to have a material impact on the company's 2020 financial results.
  • Includes accelerating franchisee rebates scheduled for payment on April 15 to April 1; retaining franchisee rebate tiers at 2019 levels for 2020; waiving domestic U.S. Brand Marketing Fund fees and applicable domestic U.S. monthly minimum royalty fees due in Q2.

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