Arbor Realty Trust,Inc. (NYSE:ABR) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

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Arbor Realty Trust,Inc. (NYSE:ABR) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information included in Item 8.01 below is incorporated by reference into this Item 2.03.

Item 8.01 Other Information.

5.625% Senior Notes due 2023

On May15, 2018, Arbor Realty Trust,Inc., a Maryland corporation (the “Company”), completed the issuance and sale of $25.0 million aggregate principal amount of its 5.625% Senior Notes due 2023 (the “Reopened Notes”) to a purchase agreement (the “Purchase Agreement”) dated May10, 2018, by and among the Company, Arbor Realty Limited Partnership, a Delaware limited partnership, and Sandler O’Neill& Partners, L.P., as initial purchaser (the “Initial Purchaser”), whereby the Company agreed to sell to the Initial Purchaser and the Initial Purchaser agreed to purchase from the Company, subject to and upon the terms and conditions set forth in the Purchase Agreement, the Reopened Notes.The Company intends to use the net proceeds from the offering to make investments relating to its business and for general corporate purposes.

The Reopened Notes are a further issuance of, are fully fungible with, and rank equally in right of payment with and form a single series with the $100.0 million principal amount of 5.625% Senior Notes due 2023 initially issued by the Company on March13, 2018 (the “Existing Notes” and, together with Reopened Notes, the “Notes”). Following this offering, the aggregate outstanding principal amount of the Notes is $125.0 million.

The Reopened Notes were offered and sold in a private offering that was exempt from the registration requirements of the Securities Act of 1933, as amended (the “Securities Act”). The Reopened Notes were offered only to persons reasonably believed to be “qualified institutional buyers” under Rule144A and institutional accredited investors under Rule501(a)(1), (2), (3)or (7). The Reopened Notes have not been registered under the Securities Act or the securities laws of any other jurisdiction. Unless so registered, the Reopened Notes may not be offered or sold in the United States except to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws.

Indenture

The Reopened Notes were issued to an indenture, dated as of March13, 2018 (the “Indenture”), between the Company and U.S. Bank National Association, as trustee (the “Trustee”). The Notes are senior unsecured obligations of the Company, bear interest at a rate equal to 5.625% per year, payable semiannually in arrears on May1 and November1 of each year, beginning on November1, 2018 and mature on May1, 2023, unless earlier repurchased or redeemed.

At any time prior to April1, 2023, the Company will have the right to redeem the Notes at a redemption price equal to 50% of the aggregate principal amount of the Notes plus a “make-whole” premium, plus accrued and unpaid interest thereon to, but excluding, the redemption date. On or after April1, 2023, the Company will have the right to redeem the Notes at a redemption price equal to 50% of the aggregate principal amount of the Notes, plus accrued and unpaid interest thereon to, but excluding, the redemption date.

The indenture contains, among other things, covenants requiring the Company to maintain a minimum net asset value, unencumbered asset ratio and senior debt service coverage ratio, and will restrict the Company’s leverage and ability to transfer the Company’s assets substantially as an entirety or merge into or consolidate with any person. These covenants are subject to a number of important qualifications and limitations.

In addition, if a change of control triggering event occurs, each holder of the Notes may require the Company to purchase all, or a portion, of such holder’s Notes at a price equal to 101% of their principal amount, plus accrued and unpaid interest thereon, if any, to, but excluding, the date of purchase.

The indenture also provides for customary events of default, including payment defaults, breaches of covenants following any applicable cure period, cross acceleration of certain debt and certain events relating to bankruptcy and insolvency. If one or more events of default occurs and continues beyond any applicable cure period, the Trustee or holders of not less than

25% in principal amount of the Notes may declare the principal amount of the Notes, and any accrued and unpaid interest thereon, to be due and payable immediately.

Registration Rights Agreement

In connection with the issuance of the Reopened Notes, the Company entered into a registration rights agreement with respect to the Reopened Notes, dated as of May15, 2018 (the “Registration Rights Agreement”), between the Company and the Initial Purchaser.

to the Registration Rights Agreement, the Company is required to use commercially reasonable efforts to, among other things, (i)file with the U.S. Securities and Exchange Commission, within 30 days of the issue date of the Reopened Notes, and cause to become effective, within 90 days of the issue date, a registration statement, on the appropriate form under the Securities Act, relating to an offer to exchange the Reopened Notes (the “Exchange Offer”) for a like aggregate principal amount of registered notes, which notes will be substantially identical to the Reopened Notes (except for the provisions relating to the transfer restrictions and payment of additional interest) and entitled to the benefits of the Indenture; and (ii)consummate the Exchange Offer within 120 days after the issue date.

If the Exchange Offer is not consummated within 120 days after the issue date of the Reopened Notes, the Company is required to use commercially reasonable efforts to (i)cause to be filed a shelf registration statement (which may be an amendment to the registration statement filed relating to the Existing Notes) covering resales of the Reopened Notes; (ii)cause such shelf registration statement to become effective under the Securities Act; and (iii)keep the shelf registration statement effective until the earlier of (x)one year following the effective date of such shelf registration statement and (y)when all of the Reopened Notes registered thereunder have been sold to such shelf registration statement or cease to be Transfer Restricted Notes (as such term is defined in the Registration Rights Agreement).

Upon the occurrence of one or more registration defaults as described below, the interest rate on the Reopened Notes will be increased by (i)0.25% per annum for the first 90-day period beginning on the day immediately following the registration default and (ii)an additional 0.25% per annum at the end of each subsequent 90-day period, until the date all registration defaults have ended or been suspended or cured or there are no longer any Transfer Restricted Notes outstanding, up to a maximum aggregate interest rate increase of 1.00% per annum. Under the Registration Rights Agreement, a registration default will occur in the event that (a)the exchange offer registration statement referred to above or, if required, the shelf registration statement referred to above has not been filed or become effective within the applicable period specified in the Registration Rights Agreement; (b)the Exchange Offer has not been consummated within the applicable period specified in the Registration Rights Agreement; or (c)the exchange offer registration statement or, if required, the shelf registration statement has become effective but thereafter ceases to be effective or usable (except as permitted, including with respect to any suspension period).

The foregoing summaries of the Indenture, the Reopened Notes and the Registration Rights Agreement in this Item 8.01 do not purport to be complete and are qualified in their entirety by reference to the full and complete texts of the Indenture, the Reopened Notes and the Registration Rights Agreement, copies of which are attached as Exhibit4.1, 4.2 and 10.1, respectively, to this Current Report on Form8-K and incorporated herein by reference

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits

ExhibitNumber

Exhibit

4.1

Indenture, dated as of March13, 2018, between the Company and U.S. Bank National Association, as trustee, incorporated by reference to Exhibit4.1 to the Company’s Current Report on Form8-K filed with the Commission on March13, 2018.

4.2

Formof 5.625% Senior Note due 2023 (included in Exhibit4.1)

10.1

Registration Rights Agreement relating to the 5.625% Senior Notes due 2023, dated as of May15, 2018, between the Company and Sandler O’Neill& Partners, L.P.


ARBOR REALTY TRUST INC Exhibit
EX-10.1 2 a18-13590_1ex10d1.htm EX-10.1 Exhibit 10.1   Execution Version   Dated as of May 15,…
To view the full exhibit click here

About Arbor Realty Trust,Inc. (NYSE:ABR)

Arbor Realty Trust, Inc. is a specialized real estate finance company that invests in a diversified portfolio of structured finance assets in the multifamily and commercial real estate markets. The Company operates in the portfolio segment of commercial mortgage loans and investments. The Company invests primarily in real estate-related bridge and mezzanine loans, including junior participating interests in first mortgages, preferred and direct equity. The Company may also directly acquire real property and invest in real estate-related notes and certain mortgage-related securities. Its principal business objective is to maximize the difference between the yield on its investments and the cost of financing these investments to generate cash available for distribution, facilitate capital appreciation and maximize total return to its stockholders. The Company is externally managed and advised by Arbor Commercial Mortgage, LLC (ACM or its Manager).