Watching Arbor Realty Trust; Viceroy Research Issues Report On Co Titled "Arbor Realty Trust – Slumlord Millionaires"
Portfolio Pulse from Benzinga Newsdesk
Viceroy Research has taken a short position on Arbor Realty Trust (NYSE:ABR), criticizing the company's loan book and collateral valuation. Viceroy claims Arbor's CLOs are distressed, with a DSCR of 0.63x and an LTV of ~77%. They argue that the appraised values of properties are unrealistic, with cap rates at ~4.7% versus a risk-free rate of ~4.6%. A revaluation at a 7% cap rate could eliminate Arbor's LTV buffer and equity. Viceroy also notes Arbor's borrowers may not have interest rate caps as claimed, and properties are undermaintained. Arbor's new loan generation is slowing, reflecting a non-viable multifamily residential investment business.
November 16, 2023 | 3:46 pm
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Viceroy Research's report suggests Arbor Realty Trust's CLOs are distressed with unrealistic property valuations, which could lead to significant financial instability for the company.
The report by Viceroy Research is highly critical of Arbor Realty Trust's financial practices, particularly the valuation of its collateralized loan obligations (CLOs). The claim that the loan book is distressed and the collateral is overstated is a serious allegation that could impact investor confidence and the company's ability to refinance its loans. The short-term impact on ABR's stock price is likely to be negative as investors digest the report and consider the potential risks outlined by Viceroy.
CONFIDENCE 80
IMPORTANCE 90
RELEVANCE 100