Arbor Realty Trust plans $300M convertible notes offering due 2029

Arbor Realty Trust, Inc. (NYSE: ABR) announced plans to offer $300 million in aggregate principal amount of Convertible Senior Notes due 2029 in a private placement to qualified institutional buyers under Rule 144A of the Securities Act of 1933.

The company also expects to grant initial purchasers a 13-day option to buy up to an additional $45 million in aggregate principal amount of the notes under the same terms.

The notes will be senior, unsecured obligations maturing on July 1, 2029, with interest paid semi-annually. The notes will not be redeemable at the company's election before maturity. Upon conversion, Arbor will settle by paying cash and, if applicable, delivering shares of common stock at the company's sole election. The interest rate, initial conversion rate, and other terms will be set at pricing.

Arbor stated it intends to use up to approximately $130 million of net proceeds to repurchase shares of its common stock. A portion of the proceeds, combined with cash on hand, will be used to redeem the company's outstanding $270 million of 4.50% Senior Notes due September 1, 2026, at par plus accrued and unpaid interest. Any remaining proceeds are designated for general corporate purposes.

In connection with the offering, Arbor expects to enter into a prepaid forward stock repurchase transaction with one of the initial purchasers or its affiliates, intended to facilitate privately negotiated derivative transactions related to the company's common stock for investors hedging their positions in the notes.

The notes have not been registered under the Securities Act or any state securities laws and may not be offered or sold in the United States except pursuant to an applicable exemption from registration requirements.

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