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Arbor – April 2025 CLO Update

Author: Published on: Published in: Arbor Realty Trust (NYSE:ABR)

April 24, 2025 – Arbor have closed 2 CLOs last month, announcing that loans will be placed in allegedly cheaper repo lines. We have amended the surveillance reporting of the remaining CLOs accordingly and uncovered more significant errors in Arbor’s reporting of total debt against underlying collateral.

  • Arbor CLO collateral appears to have undisclosed liens, including mezzanine financing and other Arbor financing.
  • Arbor claims to have moved 2021-FL1 and 2022-FL2 loans to a “considerably cheaper” repo line. We believe this is a lie (which is consistent with management’s M.O.). The repo rate will be revealed in the upcoming 10-Q.
  • Net interest spreads have collapsed across all of Arbor’s CLOs. In 2022-FL2, the net interest spread is now below 50bps, and many borrowers are paying effective rates below SOFR due to Arbor’s widespread modification practices.
  • There is no rate cut on the horizon to save Arbor or its borrowers.

There is no underlying operational improvement secured against these loans, no opportunity to transition these loans into agency or any other feasible lending product, and (obviously) no buyer for these loans at their marked price. These loans are in transition to foreclosures, and nothing else.

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