Arbor Realty Trust said Tuesday it has priced a second securitization backed by commercial real estate bridge loans.
The deal, to be issued by two newly formed subsidiaries, willl include approximately $177 million of investment grade debt paying an interest rate of approximately 235 basis poinst over one-month Libor, excluding fees and transaction costs. Arbor expects to retain an equity interest in the portfolio of approximately $83 million.
The transaction is expected to close by the end of January.
The facility has a two-year reinvestment period during which fund from repayment of collateral can be used to purchase additional assets.
The face value of the collateral in the initial portfolio is expected to be approximately $260 million and will consist primarily of first mortgage bridge loans and $50 million of cash that can be used to finance additional loans for a period of up to 90 days from the closing date.
Arbor will use the proceeds of this offering to repay borrowings under its current credit facilities, pay transaction expenses and to fund future loans and investments.
"We are extremely pleased to have accessed the securitization market again with the successful pricing of our second CLO in the last four months," said Ivan Kaufman, the REIT's chairman and chief executive, said in a press release.
"This transaction clearly demonstrates significant improvements in pricing and terms, which is reflective of the current market conditions and in our ability to execute our business strategy."