Anywhere Real Estate Inc.
EARNINGS CALL: Anywhere Real Estate Cites Lack of Houses for Sale Driving Lower Results; Aims to Launch Public Exchange Offer on ‘Similar Terms’ to Private Exchange Announced Today
Tue 07/25/2023 11:00 AM
During an earnings call to discuss second-quarter 2023 results, Anywhere Real Estate management spoke about its presentation. It mentioned that the lower financial results were driven by a decline in units sold, as prices for houses were relatively flat.
Management discussed the debt exchange with Angelo Gordon announced this morning, adding that it will look to have a public exchange offer on “similar terms” for a portion of its remaining outstanding debt, although it did not offer any further details as to the timing or size of the contemplated offer. CFO Charlotte Simonelli described the transaction as “opportunistic.”
Management noted that despite the challenging market, it delivered results in line with expectations. It further stressed that many market issues are exacerbated by the lack of supply of homes for sale, with CEO Ryan Schneider noting that over 60% of homeowners in the United States have fixed-rate mortgages below 4%, creating a disincentive to sell in the current interest rate environment. He further opined that there are plenty of buyers in the market for new homes, with some homebuilders willing to provide incentives to offset higher borrowing costs to an effective 5% to 5.5% range.
Anywhere’s second-quarter transactions are summarized in the chart below:
Simonelli spoke about the company’s expense savings target, saying that about two-thirds of the savings will be permanent and are not expected to reverse when sales volumes increase. She added that most of the cost savings would come from headcount reductions and a reduction in office costs.
Management discussed the debt exchange with Angelo Gordon announced this morning, adding that it will look to have a public exchange offer on “similar terms” for a portion of its remaining outstanding debt, although it did not offer any further details as to the timing or size of the contemplated offer. CFO Charlotte Simonelli described the transaction as “opportunistic.”
Management noted that despite the challenging market, it delivered results in line with expectations. It further stressed that many market issues are exacerbated by the lack of supply of homes for sale, with CEO Ryan Schneider noting that over 60% of homeowners in the United States have fixed-rate mortgages below 4%, creating a disincentive to sell in the current interest rate environment. He further opined that there are plenty of buyers in the market for new homes, with some homebuilders willing to provide incentives to offset higher borrowing costs to an effective 5% to 5.5% range.
Anywhere’s second-quarter transactions are summarized in the chart below:
Simonelli spoke about the company’s expense savings target, saying that about two-thirds of the savings will be permanent and are not expected to reverse when sales volumes increase. She added that most of the cost savings would come from headcount reductions and a reduction in office costs.
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