Arbor Realty restructures $247 million of trust preferreds through issuance of new notes

By Jennifer Chiou

New York, May 7 - Arbor Realty Trust, Inc. announced the restructuring of $247 million of its $276 million of trust preferred securities.

Of the $276 million of trust preferreds on the company's Dec. 31 balance sheet, $268 million were junior subordinated notes to third-party investors and $8 million was common equity issued to Arbor.

The company said it issued about $268 million of new junior subordinated notes, representing 112% of the original face amount, in exchange for about $240 million of existing junior subordinated notes.

The new notes bear interest at 0.5% per year beginning on Feb. 1, 2009 and ending on April 30, 2012, the modification period.

The company added that it paid an about $1.4 million transaction fee to the issuers of the junior subordinated notes for the restructuring.

During the modification period, the company will be permitted to make distributions of up to 100% of taxable income to common shareholders in the form of stock.

Arbor Realty is a real estate investment trust based in New York that invests in multi-family and commercial real estate-related bridge and mezzanine loans, preferred equity, discounted mortgage notes and mortgage-related securities.

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