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Arbor Realty – The MF Recap

June 20, 2024 – This report will round up Q2 2024. Accordingly, we have prepared a high-level summary of our work to date this year for ease of reference. We also have a list of simple questions for Arbor’s management considering their fraudulent, insulting, and idiotic assertions.

  • This report will also provide a review of Arbor’s Q1 2024 10-Q, and statements made by management in their earnings call.
  • Arbor’s borrowers are almost exclusively distressed. The underlying DSCR of Arbor’s CLOs is now significantly below 0.6x and represents a majority of Arbor’s book.
  • Viceroy have obtained Capital Call letters from syndicates, confirming that Arbor is accepting modifications with significant PIK accruals.
  • PIK accruals appear to contribute to an otherwise large and unknown working capital account titled “other assets”, which is a $400m black hole.
  • An analysis of Arbor’s net debt spread vs SOFR shows Arbor’s earnings quality and asset efficiency have deteriorated sharply since mid-2022.

We have attempted to clarify numerous poignant questions directly with Arbor management.