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Arbor Realty Trust completes convertible $75M senior notes offering

Arbor RealtyTrust Inc. completed the issuance and sale of its $75 millionoffering of 6.50%convertible senior notes due 2019.

The notes bear an interest rate of 6.50% per year, whichwill be payable semiannually in arrears on April 1 and Oct. 1 of each year,beginning April 1, 2017. They will mature Oct. 1, 2019, unless they areconverted or repurchased earlier.

Per the offering, the company also granted its underwritersthe right to purchase about $11.3 million aggregate principal amount of thenotes to cover overallotments. Arbor Realty expects net proceeds of $71.8million after deducting underwriters' discounts, commissions and estimatedoffering expenses, or $82.6 million if the underwriters' option is exercised infull. The proceeds will be used for business investments and general corporatepurposes.

Initially, the conversion rate will equal 119.3033 shares ofcommon stock per $1,000 principal amount of notes, equaling $8.38 per share ofcommon stock, or a 10% conversion premium based on the per-share closing priceof $7.62 on Sept. 29. The notes will be convertible prior to July 1, 2019,under certain conditions and at any time on or after that date. The company maysettle the conversions in cash, shares of common stock or a combination of thetwo.

J.P. Morgan Securities LLC, JMP Securities LLC and MerrillLynch Pierce Fenner & Smith Inc. were joint book runners for the offering.