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Investing.com - Arbor Realty Trust (NYSE:ABR) has priced a $500 million senior notes offering at a borrowing rate of 7.875%, according to Keefe, Bruyette & Woods, which reiterated its Market Perform rating and $11.00 price target on the stock.
The real estate investment trust plans to use part of the proceeds to redeem its Convertible Notes due 2025, which have $287.5 million of outstanding principal remaining.
The transaction is expected to generate approximately $212 million in additional liquidity for Arbor Realty Trust before accounting for transaction costs.
Keefe, Bruyette & Woods views the issuance positively, noting that the borrowing rate compares favorably to recent offerings in the market.
The research firm anticipates a positive market reaction to the news, as the offering strengthens the company’s liquidity position while maintaining reasonable borrowing costs.
In other recent news, Arbor Realty Trust reported first-quarter earnings that fell short of analyst expectations. The company posted adjusted earnings per share of $0.16, missing the consensus estimate of $0.29. However, revenue exceeded expectations, coming in at $134.16 million compared to the anticipated $104.55 million, despite a year-over-year decline from $157.1 million. Additionally, Arbor Realty Trust recently priced a $500 million offering in 7.875% Senior Notes due 2030, with proceeds partly allocated to refinancing existing debt. In terms of analyst activity, Citizens JMP maintained a Market Outperform rating with a $13.50 price target, citing confidence in Arbor’s business strategy and potential total return. Conversely, Keefe, Bruyette & Woods reduced their price target to $11.00 from $11.75, maintaining a Market Perform rating due to ongoing credit challenges and revised earnings estimates. The company also held its annual stockholders’ meeting, electing four Class I directors and ratifying its independent auditor for the fiscal year. Arbor Realty Trust continues to face challenges with non-performing loans and real estate owned expenses, yet it remains active in securing and expanding repurchase facilities.
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