Arbor Realty Trust Inc., New York, has announced the closing of a collateralized debt obligation through two subsidiaries: the issuer, Arbor Realty Mortgage Securities Series 2004-1 Ltd., and the co-issuer, Arbor Realty Mortgage Securities Series 2004-1 LLC.Arbor said another subsidiary retained the equity interest in the issuer, with a value of approximately $164 million. The CDO, consisting of approximately $305 million of floating-rate notes, is secured by a portfolio of real-estate-related assets with a face value of approximately $441 million. The portfolio consists chiefly of bridge and mezzanine loans and junior participating interests in first mortgages, Arbor said. "Our cost of funds has been reduced and the term of the CDO is longer than the terms of our other credit facilities," said Ivan Kaufman, Arbor's chief executive officer. "In addition, the CDO structure provides us with greater flexibility in financing our future loans and investments."

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