From forbes.com regarding Realogy, the owner of Coldwell Banker:
/28/08, 12:51 AM ET
Realogy’s outlook cut to negative; ratings affirmed – S&P
(Thomson Financial) – Standard & Poor’s Ratings Service said it has revised Realogy Corp’s outlook to negative from stable, citing a significantly lower expectation for EBITDA generation in 2008 than S&P had previously expected, and the resultant narrowing of the EBITDA cushion in the company’s senior secured credit facilities leverage covenant.
S&P affirmed the real estate franchisor’s ratings, including the ‘B’ corporate credit rating.
The rating reflects Realogy’s highly leveraged capital structure, thin expected EBITDA coverage of interest expense, and reduced cash flow generating ability due to the residential real estate downturn and the close of its $9 billion leveraged buyout by Apollo Management LP in April 2007, S&P said.
Friday, April 4, 2008
Wednesday, April 2, 2008
When It's time for a change
By now many of you may be aware of the change of the Homesale Services Group from Coldwell Banker to Prudential.
I can assure everyone that the Directors of Homesale did not take this action lightly. They had a long relationship with Coldwell Banker.
The question is who really left whom. Coldwell Banker had ceased to be a purely supportive franchisor of a brand name. It had first been purchased by NRT which also owned the ERA and Century 21 names and many others. NRT became Realogy. Realogy was purchased by Apollo Management LP. During this time under the NRT and subsequent names it was involved in setting up and purchasing its own "stores" to compete with its franchisees. In the Harrisburg market it purchased Jack Gaughen labeled it ERA and began competing directly with its own franchisees.
This led to the strange situation of franchisees such as Homesale Services Group paying fees to the parent of Coldwell Banker which were being used in part to fund direct competitors owned by the parent. The good news was Homesale Services continued to grow and take market share even from the "company stores."
Then Apollo bought Realogy. Just before the California market drop. They bought lots of assets in markets that were shrinking.
This led to thinner and thinner earnings to support franchisees. The Coldwell Banker piece of Realogy has laid off hundreds of employees. The national business press started to worry about the debt Apollo took on to finance their purchase of Realogy.
During all this, Homesale Services was trying to work out an extension of the franchise agreement. Lots of starts and stops. Unable to pin Realogy down to a long term commitment, Homesale Services had to start exploring its options.
Lots of study, and the answer is Prudential. No fighting company stores, they don't own any. Just a pure part of the Rock.
Name recognition, live support people, and some of the neatest cutting edge web tools. Everything Coldwell should have been and more.
I can assure everyone that the Directors of Homesale did not take this action lightly. They had a long relationship with Coldwell Banker.
The question is who really left whom. Coldwell Banker had ceased to be a purely supportive franchisor of a brand name. It had first been purchased by NRT which also owned the ERA and Century 21 names and many others. NRT became Realogy. Realogy was purchased by Apollo Management LP. During this time under the NRT and subsequent names it was involved in setting up and purchasing its own "stores" to compete with its franchisees. In the Harrisburg market it purchased Jack Gaughen labeled it ERA and began competing directly with its own franchisees.
This led to the strange situation of franchisees such as Homesale Services Group paying fees to the parent of Coldwell Banker which were being used in part to fund direct competitors owned by the parent. The good news was Homesale Services continued to grow and take market share even from the "company stores."
Then Apollo bought Realogy. Just before the California market drop. They bought lots of assets in markets that were shrinking.
This led to thinner and thinner earnings to support franchisees. The Coldwell Banker piece of Realogy has laid off hundreds of employees. The national business press started to worry about the debt Apollo took on to finance their purchase of Realogy.
During all this, Homesale Services was trying to work out an extension of the franchise agreement. Lots of starts and stops. Unable to pin Realogy down to a long term commitment, Homesale Services had to start exploring its options.
Lots of study, and the answer is Prudential. No fighting company stores, they don't own any. Just a pure part of the Rock.
Name recognition, live support people, and some of the neatest cutting edge web tools. Everything Coldwell should have been and more.
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