Arbor Realty Upsizes and Prices Convertible Senior Notes Offering at $325 Million

Arbor Realty Trust has successfully priced an expanded offering of convertible senior notes, reaching a total of $325 million. Initially, the company had announced a proposed offering of $275 million in these notes, but investor interest led to an increase in the offering size. The notes carry a stated interest rate of 4.75% per annum, payable semi-annually on June 1 and December 1 of each year, commencing December 1, 2020. They are slated to mature on June 1, 2027, unless repurchased, redeemed, or converted earlier in accordance with their terms. According to Seeking Alpha, these notes are senior, unsecured obligations of Arbor Realty Trust. They rank equally in right of payment with all of the company's existing and future senior unsecured indebtedness and senior to any of its future subordinated indebtedness. The notes will also be effectively subordinated to any of Arbor Realty Trust's future secured indebtedness to the extent of the value of the collateral securing such indebtedness. Holders of the notes will have the option to convert them into cash, shares of Arbor Realty Trust's common stock, or a combination of both, at the company's election. This conversion feature becomes available under certain circumstances and during specified periods. The initial conversion rate is set at 69.8370 shares of common stock per $1,000 principal amount of notes, which is equivalent to an initial conversion price of approximately $14.32 per share. The offering is anticipated to close around June 5, 2020, subject to the customary closing conditions. Arbor Realty Trust intends to utilize the net proceeds from this offering for general corporate purposes, which may include the repayment of existing indebtedness and potential future investments.