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UNIONDALE, NY-Locally based Arbor Realty Trust said Tuesday that it has completed a $374-million restructuring of its financing facilities with Wachovia Bank for three years. Additionally, the REIT has agreed in principle to amend its management agreement with Arbor Commercial Mortgage, LLC, as external manager.

Through Wachovia, Arbor has two term loan facilities with an outstanding aggregate balance of $332 million and a working capital facility with an outstanding balance of $42 million. These facilities were consolidated into one term debt facility with an outstanding balance of $317 million and one working capital facility with an outstanding balance of $57 million. The maturity dates of the facilities were extended for three years, according to a release.

As part of the deal, Arbor issued Wachovia one million warrants at an average strike price of $4. Half of these warrants are exercisable immediately at a price of $3.50; 250,000 warrants are exercisable after July 23, 2010 at a price of $4; and 250,000 warrants are exercisable after July 23, 2011 at a price of $5. All warrants expire on July 23, 2015, the REIT says.

Additionally, the financial covenants on the facilities have been reduced, Arbor says. The REIT must now maintain a minimum quarterly liquidity of $7.5 million in cash and cash equivalents, a minimum quarterly GAAP net worth of $150 million and a quarterly ratio of no more than 4.5 to one in total liabilities to tangible net worth.

Other than the Wachovia facilities, Arbor in the second quarter also extended two of its financing facilities with an outstanding balance of approximately $15 million for one year, with one-year extension options; and also retired its only other remaining short-term financing facility, which had a $37-million balance. “This, combined with our ability to restructure our trust preferred securities, has put us in a position where all of our non- CDO-debt has been modified and/or extended for the long term,” CEO Ivan Kaufman says in a statement.

The amended management agreement with Arbor Commercial Mortgage replaces the existing base management fee structure. It’s retroactive to Jan. 1 of this year, the REIT says.

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