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Arbor Realty Trust Closes Collateralized Loan Obligation

UNIONDALE, N.Y., Sept. 24, 2012 (GLOBE NEWSWIRE) -- Arbor Realty Trust, Inc. (NYSE:ABR), a real estate investment trust focused on the business of investing in real estate related bridge and mezzanine loans, preferred and direct equity investments, mortgage-related securities and other real estate related assets, today announced the closing of a $125 million collateralized loan obligation (CLO) issued by two newly-formed subsidiaries of Arbor. An aggregate of $87.5 million of investment grade-rated debt was issued, and Arbor retained an equity interest in the portfolio with a notional amount of $37.5 million.

The notes have an initial weighted average spread of approximately 339 basis points over one-month LIBOR, excluding fees and transaction costs. The facility has a two-year replenishment period that allows the principal proceeds from repayments of the collateral assets to be reinvested in qualifying replacement assets, subject to certain conditions. The closing of this transaction provides Arbor with approximately $32 million of liquidity and approximately $42 million of capacity in short term credit facilities, due to the transfer of certain assets into the CLO.

"We are extremely pleased to be the first commercial mortgage REIT in our space to successfully access the securitization market with the closing of this type of non-recourse debt vehicle," said Ivan Kaufman Chairman and Chief Executive Officer. "We believe the completion of this transaction is evidence of our strong reputation in the market and our ability to originate high quality assets. This is a crucial step in the growth of our franchise and has positioned us very favorably going forward. Our focus continues to be to originate attractive investment opportunities, to grow our portfolio and appropriately lever these investments increasing the returns on our equity. In addition to increasing our leverage and further strengthening our funding sources, the closing of this transaction also provides us with approximately $74 million of liquidity, in cash and capacity in our financing facilities, to fund future growth."

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