Arbor Realty – July 2024 Surveillance Report

Author: Viceroy Research Published on: July 25, 2024 Published in: Arbor Realty Trust (NYSE:ABR)

July 25, 2024 – Viceroy have little confidence that Arbor will accurately portray the quality of its book in its earnings tomorrow. This surveillance report of Arbor’s CLO for the month of July more accurately shows that Arbor’s loan book is a raging dumpster fire.

According to Bloomberg, Arbor is under investigation by the DOJ and FBI.

We note that Arbor has, intentionally or not, erroneously reported modification data in their CLO. Previously modified loans now appear to have modifications reversed. Arbor appears to have backdated modifications to 2023, which would therefore not appear on Viceroy’s monthly surveillance reports which have (until now) only tracked loans modified in 2024.
Arbor has modified $4.0b of loans (~168 properties), representing ~64% of its ~$6.7b CLO portfolio (~333 properties).
Arbor has provided favorable mezzanine financing to distressed clients to “rehabilitate” their loans.
$680m of loans (~47 properties) in the CLO portfolios are delinquent.
The DSCR of the CLO portfolio is ~0.51x, down 500bps from last quarter

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