Arbor Realty Trust,Inc. (NYSE:ABR) Files An 8-K Entry into a Material Definitive Agreement

Arbor Realty Trust,Inc. (NYSE:ABR) Files An 8-K Entry into a Material Definitive Agreement

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Item 1.01 Entry into a Material Definitive
Agreement.

On April11, 2017, Arbor Realty Trust,Inc. (Arbor) announced that
two of its consolidated subsidiaries, Arbor Realty Commercial
Real Estate Notes 2017-FL1,Ltd. (the Issuer) and Arbor Realty
Commercial Real Estate Notes 2017-FL1, LLC (the Co-Issuer and
together with the Issuer, the Issuers) issued $279,000,000
principal amount of investment grade-rated notes (the Notes),
evidencing a commercial real estate mortgage securitization (the
Securitization), and sold such Notes in a private placement.
Simultaneously with the issuance of the Notes, the Issuer issued
and sold preferred shares with a notional amount of $81,000,000
to a third consolidated subsidiary of Arbor.

The Notes were issued to an indenture, dated as of April11, 2017.
The information contained in Item 2.03 of this Form8-K regarding
the terms of the indenture and the Notes is incorporated by
reference into this Item 1.01.

The Notes have not been registered under the Securities Act of
1933, as amended (the Securities Act), or any state securities
laws, and unless so registered, 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.

The net proceeds of the sale of the Notes will be used to repay
borrowings under Arbors current credit facilities, pay
transaction expenses and fund future loans and investments.

Item 2.03 Creation of a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.

The aggregate principal amounts of the following three classes of
Notes (each, a Class) were issued to the terms of an indenture,
dated as of April11, 2017 (the Indenture) by and among the
Issuers, Arbor Realty SR,Inc., as advancing agent, and U.S. Bank,
National Association, as trustee, paying agent, calculation
agent, transfer agent, custodial securities intermediary, backup
advancing agent and notes registrar: (1)$201,600,000 aggregate
principal amount of ClassA Senior Secured Floating Rate Notes;
(2)$27,000,000 aggregate principal amount of ClassB Secured
Floating Rate Notes; and (3)$50,400,000 aggregate principal
amount of ClassC Secured Floating Rate Notes. Simultaneously with
the issuance of the Notes, the Issuer also issued and sold
preferred shares (the Preferred Shares) with a notional amount of
$81,000,000 to a consolidated subsidiary of Arbor.

As of the Securitization closing date (the Closing Date), the
Notes are secured by a portfolio of real estate related assets
and cash with a face value of approximately $360,000,000, with
real estate related assets consisting primarily of first mortgage
bridge loans. Through its ownership of the equity of the Issuer,
Arbor intends to own the portfolio of loan obligations until its
maturity and will account for the issuance of the Notes on its
balance sheet as a financing. The financing has an approximate
three year replacement period that allows the principal proceeds
and sale proceeds (if any) of the loan obligations to be
reinvested in qualifying replacement loan obligations, subject to
the satisfaction of certain conditions set forth in the
Indenture. The proceeds of the issuance of the securities also
includes approximately $63,845,000 for the purpose of acquiring
additional loan obligations for a period of up to 120 days from
the Closing Date, at which point it is expected that the Issuer
will own loan obligations with a face value of approximately
$360,000,000. If the Issuer is unable to invest any additional
financing capacity in suitable loan obligations within 120 days
of the Closing Date, remaining cash and cash equivalents will be
used to redeem the Notes in order of seniority to the Indenture.

The loan obligations acquired on the Closing Date were purchased
by the Issuer from a consolidated subsidiary of Arbor, and the
seller made certain representations and warranties to the Issuer
with respect to the loan obligations it sold. If any such
representations or warranties are materially inaccurate, the
Issuer may compel the seller to repurchase the affected loan
obligations from it for an amount not exceeding par plus accrued
interest and certain additional charges, if then applicable.
Additional loan obligations and replacement loan obligations are
expected to be purchased on similar terms, to the requirements
set forth in the Indenture.

The Issuer entered into a Loan Obligation Management Agreement
with Arbor Realty Collateral Management, LLC, a consolidated
subsidiary of Arbor (the Loan Obligation Manager) to which the
Loan Obligation Manager has agreed to advise the Issuer on
certain matters regarding the loan obligations and other
eligible investments securing the Notes. The Loan Obligation
Manager has waived its right to receive a management fee for
the services rendered under the Loan Obligation Management
Agreement.

The Issuer, the Loan Obligation Manager and the trustee entered
into a Servicing Agreement with Arbor Multifamily Lending, LLC,
a wholly owned subsidiary of Arbor (the Servicer) to which the
Servicer has agreed to act as the servicer and special servicer
for the loan obligations. In connection with its duties under
the Servicing Agreement, the Servicer has waived its right to
servicing and special servicing fees but will be entitled to
reimbursement of certain costs and expenses.

The Notes represent non-recourse obligations of the Issuer
payable solely from the loan obligations and certain other
assets pledged under the Indenture. To the extent the loan
obligations and other pledged assets are insufficient to make
payments in respect of the Notes, neither of the Issuers will
have any obligation to pay any further amounts in respect of
the Notes.

The Notes have an initial weighted average interest rate of
approximately 1.99% plus one-month LIBOR. Interest payments on
the Notes are payable monthly, beginning on May15, 2017, to and
including April15, 2027, the stated maturity date of the Notes.
As advancing agent under the Indenture, Arbor Realty SR,Inc., a
consolidated subsidiary of Arbor, may be required to advance
interest payments due on the Notes on the terms and subject to
the conditions set forth in the Indenture. Arbor Realty SR,Inc.
is entitled to receive a fee, payable on a quarterly basis in
accordance with the priority of payments set forth in the
Indenture, equal to 0.07% per annum on the aggregate
outstanding principal amount of the Notes.

Each Classof Notes will mature at par on April15, 2027, unless
redeemed or repaid prior thereto. Principal payments on each
Classof Notes will be paid at the stated maturity in accordance
with the priority of payments set forth in the Indenture.
However, it is anticipated that the Notes will be paid in
advance of the stated maturity date in accordance with the
priority of payments set forth in the Indenture. The weighted
average life of the Notes is currently expected to be between
3.6 years and 4.8 years. The calculation of the weighted
average lives of the Notes assumes certain collateral
characteristics including that there are no prepayments,
defaults, extensions or delinquencies. There is no assurance
that such assumptions will be met.

In general, payments of interest on the ClassA Notes (including
any defaulted interest amount) will be senior to all payments
of interest on the ClassB Notes and ClassC Notes (including any
defaulted interest amount) and payments of interest on the
ClassB Notes (including any defaulted interest amount) will be
senior to all payments of interest on the ClassC Notes
(including any defaulted interest amount). In general, payments
of principal of the ClassA Notes will be senior to all payments
of principal of the ClassB Notes and ClassC Notes and payments
of principal on the ClassB Notes will be senior to all payments
of principal on the ClassC Notes. Payments on the Notes will be
senior to dividends and all other distributions in respect of
the preferred shares.

The Notes are subject to a clean-up call redemption (at the
option of and at the direction of the Loan Obligation Manager),
in whole but not in part, on any interest payment date on which
the aggregate outstanding principal amount of the Notes has
been reduced to 10% of the aggregate principal amount of the
Notes outstanding on the issuance date.

Subject to certain conditions described in the Indenture, on
November15, 2019, and on any interest payment date thereafter,
the Issuer may redeem the Notes and the Preferred Shares at the
direction of the holders of a majority of the Preferred
Shareholders.

The Notes are also subject to a mandatory redemption on any
interest payment date on which certain note protection tests
set forth in the Indenture are not satisfied and following the
end of the 120-day period for acquisition of additional assets
if the ratings assigned to the Notes as of the Closing Date are
downgraded or withdrawn. Any mandatory redemption of the Notes
is to be paid from interest and principal proceeds of the loan
obligations in accordance with the priority of payments set
forth in the Indenture, until the applicable note protection
tests are satisfied or the applicable ratings are reinstated.

If certain events occur that would make the Issuer subject to
paying U.S. income taxes or would make certain payments to or
from the Issuer subject to withholding tax, then the holders of
a majority of the Preferred Shareholders may require that the
Issuer prepay all of the Notes.

Arbor Realty SR,Inc. has agreed to comply with the retention
requirements of Regulation RR under the Securities Exchange Act
of 1934, as amended, by causing a majority-owned affiliate (as
defined in Regulation RR) to retain Preferred Shares in an
amount equal to not less than 5% of the fair value of the Notes
and Preferred Shares as of the Closing Date. However, if
Regulation RR is modified or repealed, Arbor Realty SR,Inc. may
choose to comply with Regulation RR as is then in effect.

The redemption price for each Classof Notes is generally the
aggregate outstanding principal amount of such Class, plus
accrued and unpaid interest (including any defaulted interest
amounts).

In addition to standard events of default, the Indenture also
contains the following events of default: (1)the requirement of
the Issuer, Co-Issuer or pool of assets securing the Notes to
register as an investment company under the Investment Company
Act of 1940, as amended, and (2)the loss of the Issuers status
as a qualified REIT subsidiary or other disregarded entity of
Arbor Realty SR,Inc.

Item 7.01 Regulation FD
Disclosure.

On April11, 2017, the Company issued a press release announcing
the closing of the commercial real estate mortgage
securitization disclosed in Items 1.01 and 2.03 of this
Form8-K, a copy of which is furnished as Exhibit99.1 hereto.

Item 9.01 Financial Statements and
Exhibits.

(d) Exhibits

ExhibitNumber

Exhibit

99.1

Press release, dated April11, 2017.


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

Arbor Realty Trust, Inc. is a real estate investment trust. The Company invests in a portfolio of structured finance assets in the multifamily and commercial real estate markets, primarily consisting of bridge and mezzanine loans, including junior participating interests in first mortgages, preferred and direct equity. Its segments include Structured Business and Agency Business. In addition, the Company may also directly acquire real property and invest in real estate-related notes and certain mortgage-related securities. It focuses on investment types, such as Bridge Financing, Mezzanine Financing, Junior Participation Financing and Preferred Equity Investments. It offers bridge financing products to borrowers, typically seeking short-term capital to use in an acquisition of property. It offers mezzanine financing in the form of loans that are subordinate to a conventional first mortgage loan and senior to the borrower’s equity in a transaction.

Arbor Realty Trust, Inc. (NYSE:ABR) Recent Trading Information

Arbor Realty Trust, Inc. (NYSE:ABR) closed its last trading session down -0.04 at 8.61 with 216,153 shares trading hands.

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