Arbor Realty Trust Upsizes $325M 6.25% Convertibles, Funds $114M Stock Repurchase Plan
ABR•Arbor Realty Trust priced an upsized $325 million 6.25% convertible senior note due 2029 with a 13-day option for $50 million and an initial conversion price of $6.10 per share (12.5% premium). Proceeds will redeem $270 million of 4.50% notes due September 2026 and fund $11.6 million direct plus $102.7 million prepaid forward share repurchases.
1. Offering and Settlement
Arbor Realty Trust launched an upsized private placement of $325 million aggregate principal amount of 6.25% convertible senior notes due July 1, 2029, with settlement expected on July 6, 2026. The offering includes a 13-day option for initial purchasers to acquire an additional $50 million of notes on identical terms.
2. Convertible Terms and Conversion Premium
The notes accrue interest semiannually and are senior unsecured obligations with no redemption right before maturity. They convert into approximately 164.0016 shares per $1,000 principal (implying a $6.10 conversion price), representing a 12.5% premium to the company’s $5.42 closing share price on June 30, 2026.
3. Use of Proceeds
Arbor Realty intends to allocate gross proceeds to redeem $270 million of 4.50% senior notes maturing September 1, 2026, repurchase $11.6 million of common shares in negotiated transactions and fund a $102.7 million prepaid forward share repurchase, with any remaining funds for general corporate purposes.
4. Prepaid Forward Share Repurchase
The $102.7 million prepaid forward transaction will repurchase approximately 18.9 million shares through a forward counterparty, facilitating derivative hedges by note investors. This structure may influence market supply of shares and hedge positions, potentially affecting the company’s stock price around the pricing date.
