mREIT Arbor Realty Trust Announces Earnings

Arbor Realty Trust (ABR) which has 3 high yield perpetual preferreds outstanding announced earnings on 2/14/2020.

With earnings that generally are pretty good, one has to wonder how long 3 issues of perpetual preferreds can remain outstanding–in particular one with a 8.50% coupon (ABR-C). Shares are all trading very strong with the ABR-C issue trading at $26.52–and it just went ex-dividend for 53 cents.

The earnings release can be read here.

5 thoughts on “mREIT Arbor Realty Trust Announces Earnings”

  1. ABR has delivered strong results for the last couple of years and the stock price has moved up smartly as a result. Well managed, the firm seems to be continuing to move strongly in the present environment. My concern is that, it is an independent firm and should we have a significant economic turn down that it has no big brother to lean on. BXMT and ACRE while offering slightly relative returns, do. As such have substantially larger allocations to the last two firms. That said, ABR has done very well..SC

  2. Same coupon as DX-A!….and I unloaded both a while back fearing call….and have missed some juicy dividends. Wish I could understand how they make their decisions re call.

    1. REITs target certain Debt/Equity Ratio’s for various reasons. (Debt/Market Cap)
      While they probably don’t outright tell you what their targets are, keeping an eye on how it is evolving through time can help determine what they might be looking to do with their capital structure. There is probably an upper limit on that ratio, so finding a high quality, comparable capital structure may be helpful to look at and see where ABR lands. They are at a 2.0x vs the peer average of 2.9x (Take a look at page 12 of their Q3 presentation here), which gives them a lot more room on the debt side and is much cheaper than equity.
      Looks like the priorities are to get their debt capital cost down, take advantage of the large premium in their common equity share price, and exit their CEO’s shares. I have no clue what their plan on their preferreds are, but keeping an eye on their D/E ratio is a good thing to watch/

      1. Total Debt, which was 4.7B for 2019, and Equity is 1.6B, puts them at 2.9 for Debt/Equity. Then use Debt over Earnings (536 million) and it is over 8x. As long as the cheap debt continues, the music of expansion will continue. Earning 500 million/year (non including all the op expenses, taxes, …. takes a long time to pay off 5B of debt. That minuscule cash left is probably not targeted towards paying off additional principle, but just paying the debt holders.

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