Arbor Realty Trust Inc. has closed a $480 million commercial real estate mortgage securitization.
The company issued an aggregate of $356 million of investment grade-rated notes and retained subordinate interests in the issuing vehicle of approximately $124 million. The collateral includes about $93 million of additional capacity to acquire future loans for up to 120 days from the closing date of the securitization.
Arbor intends to own the portfolio of real estate-related assets through the vehicle until its maturity and expects to account for the securitization on its balance sheet as a financing.
The notes have an initial weighted-average spread of about 136 basis points over one-month LIBOR, excluding fees and transaction costs. The facility has a three-year replenishment period that allows the principal proceeds from repayments of the portfolio assets to be reinvested in qualifying replacement assets, subject to certain conditions.
Arbor intends to use the proceeds to repay borrowings under its current credit facilities, to pay transaction expenses, and to fund future loans and investments.
