Arbor Realty greenshoe exercised, lifts 7.5% three-year convertible notes to $287.5 million

By Wendy Van Sickle

Columbus, Ohio, Aug. 5 – Underwriters for Arbor Realty Trust Inc.’s 7.5% convertible notes due Aug. 1, 2025 fully exercised their $37.5 million greenshoe, increasing the total deal size to $287.5 million, according to an 8-K filing with the Securities and Exchange Commission.

The company priced an upsized $250 million of the convertibles after the market close on Tuesday with an initial conversion premium of 10%, as previously reported. The greenshoe was upsized from $30 million.

Price talk was for a coupon of 7% to 7.5% and an initial conversion premium of 10% to 15%, according to a market source. The issue size was initially planned to be $200 million.

J.P. Morgan Securities LLC and JMP Securities LLC are bookrunners for the Rule 144A offering.

The notes are non-callable and carry dividend protection above 39 cents a quarter.

They will be settled in cash, shares or a combination of both at the company’s option.

Proceeds will be used to repurchase the company’s 4.75% convertible notes due Nov. 1, 2022 for cash. Any remaining proceeds will be used for general corporate purposes.

Arbor Realty is a Uniondale, N.Y.-based real estate investment trust.

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