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Short And Long Term-Debt | 9 Months Ended
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Sep. 30, 2016
Debt Disclosure [Abstract] |
Short And Long-Term Debt | SHORT AND LONG-TERM DEBT Total indebtedness is as follows:
| September 30, 2016 |  | December 31, 2015
Senior Secured Credit Facility: |  |  |
Revolving Credit Facility | $ | 155 |  |  | $ | 200 |
Term Loan B | 1,071 |  |  | 1,839 |
Term Loan A Facility: |  |  |
Term Loan A | 417 |  |  | 433 |
Term Loan A-1 | 349 |  |  | — |
3.375% Senior Notes | — |  |  | 499 |
4.50% Senior Notes | 438 |  |  | 434 |
5.25% Senior Notes | 545 |  |  | 297 |
4.875% Senior Notes | 495 |  |  | — |
Total Short-Term & Long-Term Debt | $ | 3,470 |  |  | $ | 3,702 |
Securitization obligations: |  |  |
Apple Ridge Funding LLC | $ | 240 |  |  | $ | 238 |
Cartus Financing Limited | 15 |  |  | 9 |
Total securitization obligations | $ | 255 |  |  | $ | 247 |
Indebtedness Table As of September 30, 2016, the Company’s borrowing arrangements were as follows:
| Interest Rate |  | Expiration Date |  | Principal Amount |  | Unamortized Discount and Debt Issuance Costs |  | Net Amount
Senior Secured Credit Facility: |  |  |  |  |  |  |  |  |
Revolving Credit Facility (1) | (2) |  | October 2020 |  | $ | 155 |  |  | $ * |  |  | $ | 155 |
Term Loan B | (3) |  | July 2022 |  | 1,097 |  |  | 26 |  |  | 1,071 |
Term Loan A Facility: |  |  |  |  |  |  |  |  |
Term Loan A | (4) |  | October 2020 |  | 419 |  |  | 2 |  |  | 417 |
Term Loan A-1 | (5) |  | July 2021 |  | 353 |  |  | 4 |  |  | 349 |
Senior Notes | 4.50% |  | April 2019 |  | 450 |  |  | 12 |  |  | 438 |
Senior Notes | 5.25% |  | December 2021 |  | 550 |  |  | 5 |  |  | 545 |
Senior Notes | 4.875% |  | June 2023 |  | 500 |  |  | 5 |  |  | 495 |
Securitization obligations: (6) |  |  |  |  |  |  |  |  |
Apple Ridge Funding LLC (7) |  |  | June 2017 |  | 240 |  |  | * |  |  | 240 |
Cartus Financing Limited (8) |  |  | October 2016 |  | 15 |  |  | * |  |  | 15 |
Total (9) | $ | 3,779 |  |  | $ | 54 |  |  | $ | 3,725 |
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* | The debt issuance costs related to our Revolving Credit Facility and securitization obligations are classified as a deferred financing asset within other assets.
(1) | As of September 30, 2016, the Company had $815 million of borrowing capacity under its Revolving Credit Facility, leaving $660 million of available capacity. The revolving credit facility expires in October 2020, but is classified on the balance sheet as current due to the revolving nature of the facility. On November 2, 2016, the Company had $115 million outstanding borrowings on the Revolving Credit Facility, leaving $700 million of available capacity.
(2) | Interest rates with respect to revolving loans under the Senior Secured Credit Facility at September 30, 2016 are based on, at the Company's option, (a) adjusted LIBOR plus an additional margin or (b) ABR plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.00% and the ABR margin was 1.00% for the three months ended September 30, 2016.
(3) | The Term Loan B provides for quarterly amortization payments totaling 1% per annum of the original principal amount. The interest rate with respect to term loans under the Term Loan B is based on, at the Company’s option, (a) adjusted LIBOR plus 3.00% (with a LIBOR floor of 0.75%) or (b) JPMorgan Chase Bank, N.A.’s prime rate ("ABR") plus 2.00% (with an ABR floor of 1.75%).
(4) | The Term Loan A provides for quarterly amortization payments, which commenced March 31, 2016, totaling per annum 5%, 5%, 7.5%, 10.0% and 12.5% of the original principal amount of the Term Loan A in 2016, 2017, 2018, 2019 and 2020, respectively. The interest rates with respect to term loans under the Term Loan A are based on, at the Company's option, (a) adjusted LIBOR plus an additional margin or (b) ABR plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.00% and the ABR margin was 1.00% for the three months ended September 30, 2016.
(5) | The Term Loan A-1 provides for quarterly amortization payments, which commenced on September 30, 2016, totaling per annum 2.5%, 2.5%, 5%, 7.5% and 10.0% of the original principal amount of the Term Loan A-1, with the last amortization payment made on June 30, 2021. The interest rates with respect to term loans under the Term Loan A-1 are based on, at the Company's option, (a) adjusted LIBOR plus an additional margin or (b) ABR plus an additional margin, in each case subject to adjustment based on the then current senior secured leverage ratio. Based on the previous quarter senior secured leverage ratio, the LIBOR margin was 2.00% and the ABR margin was 1.00% for the three months ended September 30, 2016.
(6) | Available capacity is subject to maintaining sufficient relocation related assets to collateralize these securitization obligations.
(7) | In June 2016, Realogy Group extended the existing Apple Ridge Funding LLC securitization program utilized by Cartus until June 2017. As of September 30, 2016, the Company had $325 million of borrowing capacity under the Apple Ridge Funding LLC securitization program leaving $85 million of available capacity.
(8) | Consists of a £10 million revolving loan facility and a £5 million working capital facility. As of September 30, 2016, the Company had $19 million of borrowing capacity under the Cartus Financing Limited securitization program leaving $4 million of available capacity. In October 2016, Realogy Group extended the existing Cartus Financing Limited securitization program to August 2017.
(9) | Not included in this table, the Company had $128 million of outstanding letters of credit at September 30, 2016 under the Unsecured Letter of Credit Facility with a weighted average rate of 3.10%. In the second quarter of 2016, the Company moved outstanding letters of credit to the Unsecured Letter of Credit Facility and terminated the synthetic letter of credit facility. As a result, the Company increased the capacity under the Unsecured Letter of Credit Facility by $47 million to $135 million.
Maturities Table As of September 30, 2016, the combined aggregate amount of maturities for long-term borrowings, excluding securitization obligations, for the remainder of 2016 and each of the next four years is as follows:
Year |  | Amount
Remaining 2016 (a) |  | $ | 165 |
2017 |  | 42 |
2018 |  | 57 |
2019 |  | 527 |
2020 |  | 357 |
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(a) | Outstanding borrowings of $155 million under the Company's revolving credit facility expire in October 2020, but are classified on the balance sheet as current due to the revolving nature of the facility.
The remaining 2016 portion of long-term debt consists of remaining 2016 quarterly amortization payments totaling $5 million, $2 million and $3 million for the Term Loan A, Term Loan A-1 and Term Loan B facilities, respectively. The current portion of long-term debt of $197 million shown on the balance sheet consists of four quarters of amortization payments totaling $22 million, $9 million and $11 million for the Term Loan A, Term Loan A-1 and Term Loan B facilities, respectively, as well as $155 million of revolver borrowings under the revolving credit facility which expires in October 2020. Senior Secured Credit Facility In July 2016, the Company entered into a third amendment to the senior secured credit agreement (the "Amended and Restated Credit Agreement"). The third amendment replaced the existing $1,858 million Term Loan B due March 2020 with a new $1,100 million Term Loan B due July 20, 2022. In addition, the Company entered into a First Amendment to the Term Loan A Agreement under which the Company borrowed a new tranche of term loans under its Term Loan A Facility ("Term Loan A-1") in the amount of $355 million with a maturity date in July 2021 (see "Term Loan A Facility" section below for more information on the issuance of the Term Loan A-1). The majority of the financing costs incurred for these transactions were deferred over the life of the agreement in accordance with debt modification accounting guidance. In October 2015, Realogy Group entered into a second amendment to the senior secured credit agreement. The second amendment provided for a five-year, $815 million revolving credit facility and included a $125 million letter of credit sub-facility. In the second quarter of 2016, the Company moved outstanding letters of credit to the Unsecured Letter of Credit Facility and terminated the synthetic letter of credit facility. See the "Other Debt Facilities" section below for more information. The Amended and Restated Credit Agreement provides for:
(a) | a Term Loan B issued in the aggregate principal amount of $1,100 million with a maturity date of July 2022. The Term Loan B has quarterly amortization payments totaling 1% per annum of the initial aggregate principal amount. The interest rate with respect to term loans under the Term Loan B is based on, at Realogy Group's option, adjusted LIBOR plus 3.00% (with a LIBOR floor of 0.75%) or ABR plus 2.00% (with an ABR floor of 1.75%); and
(b) | an $815 million Revolving Credit Facility with a maturity date of October 23, 2020, which includes (i) a $125 million letter of credit subfacility and (ii) a swingline loan subfacility. The interest rate with respect to revolving loans under the Revolving Credit Facility is based on, at Realogy Group's option, adjusted LIBOR or ABR plus an additional margin subject to the following adjustments based on the Company’s then current senior secured leverage ratio:
Senior Secured Leverage Ratio | Applicable LIBOR Margin | Applicable ABR Margin
Greater than 3.50 to 1.00 | 2.50% | 1.50%
Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00 | 2.25% | 1.25%
Less than 2.50 to 1.00 | 2.00% | 1.00%
The Amended and Restated Credit Agreement permits the Company to obtain up to $500 million of additional credit facilities from lenders reasonably satisfactory to the administrative agent and us, without the consent of the existing lenders under the new senior secured credit facility, plus an unlimited amount if Realogy Group's senior secured leverage ratio is less than 3.50 to 1.00 on a pro forma basis. Subject to certain restrictions, the Amended and Restated Credit Agreement also permits us to issue senior secured or unsecured notes in lieu of any incremental facility. The obligations under the Amended and Restated Credit Agreement are secured to the extent legally permissible by substantially all of the assets of Realogy Group, Realogy Intermediate and all of their domestic subsidiaries, other than certain excluded subsidiaries. Realogy Group’s Amended and Restated Credit Agreement contains financial, affirmative and negative covenants and requires Realogy Group to maintain a senior secured leverage ratio, not to exceed 4.75 to 1.00, and pursuant to the second amendment discussed above, the leverage ratio is tested quarterly, commencing with the period ended September 30, 2015, regardless of the amount of borrowings outstanding and letters of credit issued under the revolver at the testing date. In this report, the Company refers to the term "Adjusted (Covenant) EBITDA" to mean EBITDA as so defined for purposes of determining compliance with the senior secured leverage covenant. The senior secured leverage ratio measured at any applicable quarter end is Realogy Group's total senior secured net debt divided by the trailing twelve month Adjusted (Covenant) EBITDA. Total senior secured net debt does not include unsecured indebtedness, including the Unsecured Notes as well as the securitization obligations. At September 30, 2016, Realogy Group’s senior secured leverage ratio was 2.18 to 1.00. Term Loan A Facility In October 2015, Realogy Group entered into the Term Loan A senior secured credit agreement. The Term Loan A Agreement provides for a five-year, $435 million loan issued at par with a maturity date of October 23, 2020 (the “Term Loan A”) and has terms substantially similar to the Amended and Restated Credit Agreement. The Term Loan A provides for quarterly amortization payments, which commenced March 31, 2016, totaling the amount per annum equal to the following percentages of the original principal amount of the Term Loan A: 5%, 5%, 7.5%, 10.0% and 12.5% for amortizations payable in 2016, 2017, 2018, 2019 and 2020, with the balance payable upon the final maturity date. The interest rates with respect to term loans under the Term Loan A are based on, at our option, adjusted LIBOR or ABR plus an additional margin subject to the following adjustments based on the Company’s then current senior secured leverage ratio:
Senior Secured Leverage Ratio | Applicable LIBOR Margin | Applicable ABR Margin
Greater than 3.50 to 1.00 | 2.50% | 1.50%
Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00 | 2.25% | 1.25%
Less than 2.50 to 1.00 | 2.00% | 1.00%
In July 2016, Realogy Group entered into a first amendment to the Term Loan A senior secured credit agreement. Under the amendment, the Company issued the Term Loan A-1 in the amount of $355 million with a maturity date in July 2021 under its existing Term Loan A Facility and on terms substantially similar to its existing Term Loan A. The Term Loan A-1 provides for quarterly amortization payments totaling 2.5%, 2.5%, 5%, 7.5% and 10.0% of the original principal amount of the Term Loan A-1, which commenced September 30, 2016 continuing through June 30, 2021. The interest rates with respect to term loans under the Term Loan A-1 are based on, at our option, adjusted LIBOR or ABR plus an additional margin subject to the following adjustments based on the Company’s then current senior secured leverage ratio:
Senior Secured Leverage Ratio | Applicable LIBOR Margin | Applicable ABR Margin
Greater than 3.50 to 1.00 | 2.50% | 1.50%
Less than or equal to 3.50 to 1.00 but greater than or equal to 2.50 to 1.00 | 2.25% | 1.25%
Less than 2.50 to 1.00 but greater than or equal to 2.00 to 1.00 | 2.00% | 1.00%
Less than 2.00 to 1.00 | 1.75% | 0.75%
Consistent with the Amended and Restated Credit Agreement, the Term Loan A Facility permits the Company to obtain up to $500 million of additional credit facilities from lenders reasonably satisfactory to the administrative agent and the company, without the consent of the existing lenders under the Term Loan A, plus an unlimited amount if the Company's senior secured leverage ratio is less than 3.50 to 1.00 on a pro forma basis. Subject to certain restrictions, the Term Loan A Facility also permits us to issue senior secured or unsecured notes in lieu of any incremental facility. Unsecured Notes The 4.50% Senior Notes, 5.25% Senior Notes and 4.875% Senior Notes (each as defined below and collectively the "Unsecured Notes") are unsecured senior obligations of Realogy Group that mature on April 15, 2019, December 1, 2021 and June 1, 2023, respectively. Interest on the Unsecured Notes is payable each year semiannually on April 15 and October 15 for the 4.50% Senior Notes and June 1 and December 1 for both the 5.25% Senior Notes and 4.875% Senior Notes. In March 2016, the Company issued 5.25% Senior Notes due 2021 of $250 million (the "Additional 5.25% Senior Notes") under the same indenture as the $300 million of Realogy Group’s 5.25% Senior Notes due 2021 issued on November 21, 2014 (the "Existing 5.25% Senior Notes") (collectively the "5.25% Senior Notes"). The Additional 5.25% Senior Notes mature on December 1, 2021 and interest on the notes is due on June 1 and December 1 of each year with the first interest payment date of June 1, 2016. The Additional 5.25% Senior Notes have identical terms, other than the issue date, the issue price and the first interest payment date, and constitute part of the same series as the Existing 5.25% Senior Notes. In the second quarter of 2016, the Company used $400 million of revolver borrowings and a portion of cash on hand to retire the $500 million of 3.375% Senior Notes at maturity. The Company also issued $500 million of 4.875% Senior Notes (the "4.875% Senior Notes") due 2023 and used the proceeds to temporarily reduce revolver borrowings. The 4.875% Senior Notes mature on June 1, 2023 and interest on the 4.875% Notes is due on June 1 and December 1 of each year with the first interest payment date of December 1, 2016. The Unsecured Notes are guaranteed on an unsecured senior basis by each domestic subsidiary of Realogy Group that is a guarantor under the Senior Secured Credit Facility and Realogy Group's outstanding debt securities and are guaranteed by Realogy Holdings on an unsecured senior subordinated basis. Other Debt Facilities The Company has an Unsecured Letter of Credit Facility to provide for the issuance of letters of credit required for general corporate purposes by the Company. In the second quarter of 2016, the Company increased the capacity under the facility by $47 million from $88 million to $135 million. The facility's expiration dates are as follows:
Capacity (in millions) | Expiration Date
$53 | June 2017
$16 | September 2018
$66 | December 2019
The fixed pricing to the Company is based on a spread above the credit default swap rate for senior unsecured debt obligations of the Company over the applicable letter of credit period. Realogy Group's obligations under the Unsecured Letter of Credit Facility are guaranteed on an unsecured senior basis by each domestic subsidiary of Realogy Group that is a guarantor under the Senior Secured Credit Facility and Realogy Group's outstanding debt securities. As of September 30, 2016, $128 million of the Facility is being utilized. Securitization Obligations Realogy Group has secured obligations through Apple Ridge Funding LLC under a securitization program. In June 2016, Realogy Group extended the program until June 2017. The program has a capacity of $325 million. At September 30, 2016, Realogy Group has $240 million of outstanding borrowings under the facility. Realogy Group, through a special purpose entity known as Cartus Financing Limited, has agreements providing for a £10 million revolving loan facility and a £5 million working capital facility, both of which expire on October 31, 2016. In October 2016, Realogy Group extended the facility to August 2017. There are $15 million of outstanding borrowings on the facilities at September 30, 2016. These Cartus Financing Limited facilities are secured by the relocation assets of a U.K. government contract in this special purpose entity and are therefore classified as permitted securitization financings as defined in Realogy Group’s Senior Secured Credit Facility and the indentures governing the Unsecured Notes. The Apple Ridge entities and the Cartus Financing Limited entity are consolidated special purpose entities that are utilized to securitize relocation receivables and related assets. These assets are generated from advancing funds on behalf of clients of Realogy Group’s relocation business in order to facilitate the relocation of their employees. Assets of these special purpose entities are not available to pay Realogy Group’s general obligations. Under the Apple Ridge program, provided no termination or amortization event has occurred, any new receivables generated under the designated relocation management agreements are sold into the securitization program and as new eligible relocation management agreements are entered into, the new agreements are designated to the program. The Apple Ridge program has restrictive covenants and trigger events, including performance triggers linked to the age and quality of the underlying assets, foreign obligor limits, multicurrency limits, financial reporting requirements, restrictions on mergers and change of control, any uncured breach of Realogy Group’s senior secured leverage ratio under Realogy Group’s Senior Secured Credit Facility, and cross-defaults to Realogy Group’s material indebtedness. The occurrence of a trigger event under the Apple Ridge securitization facility could restrict our ability to access new or existing funding under this facility or result in termination of the facility, either of which would adversely affect the operation of our relocation business. Certain of the funds that Realogy Group receives from relocation receivables and related assets must be utilized to repay securitization obligations. These obligations were collateralized by $282 million and $281 million of underlying relocation receivables and other related relocation assets at September 30, 2016 and December 31, 2015, respectively. Substantially all relocation related assets are realized in less than twelve months from the transaction date. Accordingly, all of Realogy Group’s securitization obligations are classified as current in the accompanying Condensed Consolidated Balance Sheets. Interest incurred in connection with borrowings under these facilities amounted to $2 million and $5 million for the three and nine months ended September 30, 2016, respectively and $1 million and $4 million for the three and nine months ended September 30, 2015, respectively. This interest is recorded within net revenues in the accompanying Condensed Consolidated Statements of Operations as related borrowings are utilized to fund Realogy Group's relocation business where interest is generally earned on such assets. These securitization obligations represent floating rate debt for which the average weighted interest rate was 2.5% and 2.0% for the nine months ended September 30, 2016 and 2015, respectively.

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- Definition The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 10 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6928386&loc=d3e21475-112644 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 210 -SubTopic 10 -Section S99 -Paragraph 1 -Subparagraph (SX 210.5-02.19,20,22) -URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682 + Details
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