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

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Arbor Realty Trust,Inc. (NYSE:ABR) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry into a Material Definitive Agreement

On November13, 2017, Arbor Realty Trust,Inc., a Maryland corporation (the “Company”), completed the issuance and sale of $125.0 million aggregate principal amount of its 5.375% Convertible Senior Notes due 2020 (the “Notes”) to an underwriting agreement (the “Underwriting Agreement”) by and among the Company, Arbor Realty Limited Partnership, a Delaware limited partnership, and J.P. Morgan Securities LLC, as representative of the several underwriters named therein (the “Underwriters”), whereby the Company agreed to sell to the Underwriters and the Underwriters agreed to purchase from the Company, subject to and upon the terms and conditions set forth in the Underwriting Agreement, the Notes. In addition, the Company granted the Underwriters the right to purchase, exercisable within a 30-day period, up to an additional $18.75 million aggregate principal amount of the Notes solely to cover over-allotments.

The Notes will be senior unsecured obligations of the Company, bear interest at a rate equal to 5.375% per year, payable semiannually in arrears on May15 and November15 of each year, beginning on May15, 2018 and will mature on November15, 2020 (the “Maturity Date”), unless earlier converted or repurchased. The Company will not have the right to redeem the Notes prior to maturity and no sinking fund is provided for the Notes. The Notes will be convertible prior to August15, 2020 upon the satisfaction of certain conditions and at any time on or after August15, 2020 until the business day preceding the Maturity Date. The Company may settle conversions in cash, shares of the Company’s common stock or a combination thereof, at the Company’s election.

The conversion rate will initially equal 107.7122 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $9.28 per share of common stock, representing an approximate 10% conversion premium based on the closing price of the Company’s common stock of $8.44 per share on November7, 2017. The conversion rate will be subject to adjustment upon the occurrence of certain specified events. In addition, following certain corporate events that occur prior to the Maturity Date, the Company will increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event in certain circumstances.

If the Company undergoes a fundamental change (as defined in the Supplemental Indenture (as defined below)), holders may require the Company to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 50% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The net proceeds to the Company from the sale of the Notes, after deducting the Underwriters’ discounts and commissions and estimated offering expenses, are expected to be approximately $121.0 million (or approximately $139.2million if the Underwriters’ over-allotment option is exercised in full). The Company intends to use the net proceeds of the offering to make investments relating to the Company’s business and for general corporate purposes. The Company may also use a portion of the net proceeds from this offering to repay certain of the Company’s indebtedness; however, the Company has no current commitments or obligations to do so.

The Notes were issued under the base indenture, dated as of May12, 2014, between the Company and U.S. Bank National Association, as trustee (the “Trustee”), as supplemented by a third supplemental indenture (the “Supplemental Indenture”), dated as of November13, 2017, between the Company and the Trustee with respect to the Notes.

The offer and sale of the Notes were registered with the Securities and Exchange Commission (the “Commission”) to a registration statement on FormS-3 (File No.333-212554) under the Securities Act of 1933, as amended (the “Securities Act”). The material terms of the Notes are described in a prospectus supplement filed by the Company with the Commission dated November7, 2017 to Rule424(b)(5)under the Securities Act.

Copies of the Underwriting Agreement, the Supplemental Indenture and the form of the Notes are attached hereto as Exhibit1.1, Exhibit4.1 and Exhibit4.2, respectively, and are incorporated herein by reference. The foregoing summaries do not purport to be complete and are qualified in their entirety by reference to the Underwriting Agreement, the Supplemental Indenture and the form of the Notes. The legal opinions of Skadden, Arps, Slate, Meagher& Flom LLP and Venable LLP relating to the legality of the Notes are attached as Exhibit5.1 and Exhibit5.2, respectively, to this Current Report on Form8-K.

Item 1.01 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant

The information set forth in Item 1.01 is incorporated herein by reference into this Item 1.01.

Item 1.01 Financial Statements and Exhibits

(d) Exhibits

ExhibitNumber

Exhibit

1.1

Underwriting Agreement, dated November7, 2017, by and among Arbor Realty Trust,Inc., Arbor Realty Limited Partnership and J.P. Morgan Securities LLC, as the representative of the several underwriters named therein

4.1

Third Supplemental Indenture, dated as of November13, 2017, between Arbor Realty Trust,Inc. and U.S. Bank National Association, as trustee

4.2

Formof 5.375% Convertible Senior Notes due 2020 (attached as ExhibitA to the Third Supplemental Indenture filed as Exhibit4.1 hereto)

5.1

Opinion of Skadden, Arps, Slate, Meagher& Flom LLP with respect to the legality of the Notes

5.2

Opinion of Venable LLP with respect to the legality of the shares of common stock underlying the Notes

8.1

Opinion of Skadden, Arps, Slate, Meagher& Flom LLP with respect to certain tax matters

12.1

Computation of Ratios of Earnings to Fixed Charges

23.1

Consent of Skadden, Arps, Slate, Meagher& Flom LLP (included in Exhibit5.1)

23.2

Consent of Venable LLP (included in Exhibit5.2)


ARBOR REALTY TRUST INC Exhibit
EX-1.1 2 a17-25203_4ex1d1.htm EX-1.1 Exhibit 1.1   Arbor Realty Trust,…
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).

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