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UNIONDALE, NY-Locally based Arbor Realty Trust has priced out its second collateralized debt obligation at $356 million. In late December 2004 Arbor priced its first CDO at $305 million. The REIT, which is focused on investing in real estate related bridge and mezzanine loans, preferred and direct equity investments, mortgage-related securities and other real estate-related assets, will use proceeds from the new CDO to repay borrowings under its current repurchase agreements and warehouse credit facilities.

The CDO will be issued by two newly formed subsidiaries of Arbor. Based on current balances within the collateral portfolio. Arbor expects to retain an equity interest in the portfolio of approximately $119 million. The debt will be issued on a floating rate basis at an initial weighted average spread of approximately 73 basis points over three-month Libor. The facility has a five-year replenishment period, giving Arbor the ability to replace assets within the facility as they pay off during this period.

The face value of the collateral in the initial portfolio is expected to be approximately $475 million and consists primarily of bridge and mezzanine loans. Arbor intends to own the portfolio until its maturity and will account for this transaction on its balance sheet as a financing.