UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 3, 2018 (June 28, 2018)
Arbor Realty Trust, Inc.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
MARYLAND
(STATE OF INCORPORATION)
001-32136 |
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20-0057959 |
(COMMISSION FILE NUMBER) |
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(IRS EMPLOYER ID. NUMBER) |
333 Earle Ovington Boulevard, Suite 900 |
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Uniondale, New York |
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11553 |
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) |
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(ZIP CODE) |
(516) 506-4200
(REGISTRANTS TELEPHONE NUMBER, INCLUDING AREA CODE)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
o Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Item 1.01 Entry into a Material Definitive Agreement
On July 3, 2018, Arbor Realty Trust, Inc., a Maryland corporation (the Company), completed the issuance and sale of $100.0 million aggregate principal amount of its 5.25% Convertible Senior Notes due 2021 (the Notes) pursuant to a purchase agreement (the Purchase Agreement), by and among the Company, Arbor Realty Limited Partnership, a Delaware limited partnership, and J.P. Morgan Securities LLC, as representative of the initial purchasers named in Schedule I thereto (the Initial Purchasers), whereby the Company agreed to sell to the Initial Purchasers and the Initial Purchasers agreed to purchase from the Company, subject to and upon the terms and conditions set forth in the Purchase Agreement, the Notes. In addition, the Company granted the Initial Purchasers the right to purchase, exercisable within a 30-day period, up to an additional $15.0 million aggregate principal amount of the Notes solely to cover over-allotments.
The Notes will be senior unsecured obligations of the Company, bear interest at a rate equal to 5.25% per year, payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2019 and will mature on July 1, 2021 (the Maturity Date), unless earlier converted or repurchased. The Company will not have the right to redeem the Notes prior to maturity and no sinking fund is provided for the Notes. The Notes will be convertible prior to April 1, 2021 upon the satisfaction of certain conditions and at any time on or after April 1, 2021 until the business day preceding the Maturity Date. The Company may settle conversions in cash, shares of the Companys common stock or a combination thereof, at the Companys election.
The conversion rate will initially equal 86.9943 shares of common stock per $1,000 principal amount of Notes, which is equivalent to an initial conversion price of approximately $11.50 per share of common stock, representing an approximate 10% conversion premium based on the closing price of the Companys common stock of $10.45 per share on June 28, 2018. The conversion rate will be subject to adjustment upon the occurrence of certain specified events. In addition, following certain corporate events that occur prior to the Maturity Date, the Company will increase the conversion rate for a holder who elects to convert its Notes in connection with such a corporate event in certain circumstances.
If the Company undergoes a fundamental change (as defined in the Indenture (as defined below)), holders may require the Company to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
The net proceeds to the Company from the sale of the Notes will be approximately $96.75 million (or approximately $111.3 million if the Initial Purchasers over-allotment option is exercised in full), after deducting the Initial Purchasers discounts and commissions and estimated offering expenses payable by the Company. Concurrently with the offering of the Notes, the Company entered into separate privately-negotiated exchange agreements (the Exchange Agreements) with certain holders of its 6.50% Convertible Senior Notes due 2019 (the 6.50% Convertible Notes) to repurchase approximately $87.9 million aggregate principal amount outstanding of its 6.50% Convertible Notes held by them (including approximately $2.6 million aggregate principal amount held by the Initial Purchasers) for approximately $78.9 million in cash (which includes accrued interest) and approximately 3.4 million shares of the Companys common stock. The Company used the net proceeds of the offering to pay the cash consideration of such Exchange Agreements and intends to use any remaining proceeds from the offering for general corporate purposes.
The Notes were issued under an indenture, dated as of July 3, 2018, between the Company and U.S. Bank National Association, as trustee (the Indenture).
The Notes and the common stock issuable upon conversion of the Notes, if any, were offered and sold in a private offering that was exempt from the registration requirements of the Securities Act of 1933, as amended (the Securities Act). The offering was made only to persons reasonably believed to be qualified institutional buyers under Rule 144A. The Notes and the common stock issuable upon conversion of the Notes, if any, have not been registered under the Securities Act or the securities laws of any other jurisdiction. Unless so registered, the Notes and the common stock issuable upon conversion of the Notes, if any, may not be offered or sold in the United States except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act and applicable state securities laws. The common stock sold pursuant to the Exchange Agreements was issued without registration under the Securities Act in reliance upon the exemption provided in Section 4(a)(2).
Copies of the Indenture and the form of the Notes are attached hereto as Exhibit 4.1 and Exhibit 4.2, respectively, and are incorporated herein by reference. The foregoing summaries do not purport to be complete and are qualified in their entirety by reference to the Indenture and the form of the Notes.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
The information set forth in Item 1.01 is incorporated herein by reference into this Item 2.03.
Item 3.02 Unregistered Sales of Equity Securities
The information set forth in Item 1.01 is incorporated herein by reference into this Item 3.02.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
Exhibit Number |
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Exhibit |
4.1 |
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4.2 |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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ARBOR REALTY TRUST, INC. | |
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By: |
/s/ Paul Elenio |
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Name: |
Paul Elenio |
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Title: |
Chief Financial Officer |
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Date: July 3, 2018 |
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