A few readers asked me if I would walk them through an analysis of a distressed debt investment case study on the blog. Well - this weekend, someone sent me Icahn Capital's 4th Quarter Investor letter (no - I will not post it...have you seen the lawyers that guy has?). In it, he talked about his position in Realogy - which is a well publicized position of Carl Icahn's fund. I have yet to look at Realogy, and thought I would walk readers through the process of getting up to speed on a credit in real time. This will be part 1 of a 3 part series.
"As of December 31, 2009, the Company’s 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 our Credit Agreement. The senior secured leverage ratio is determined by taking Realogy’s senior secured net debt of $2.89 billion at December 31, 2009 and dividing it by the Company’s Adjusted EBITDA of $619 million for the 12 months ended December 31, 2009."
"On February 15, 2010, Apollo advised the Company that, through one of its affiliates, it owns approximately $995 million in aggregate principal amount of Unsecured Notes."