Viceroy Research has issued a follow-up short report on Arbor Realty Trust claiming that delinquencies on the company’s portfolio of multifamily residential investments are accelerating.
In its initial short report issued November 16, Viceroy claims it examined Arbor’s collateral loan obligations (CLOs) and came to the conclusion that the “entire loan book is distressed and underlying collateral is vastly overstated.”
In the update issued Wednesday, the activist noted that Arbor’s “November CLO vintages” indicate delinquencies are up around 40-50% over the last 30 days.
“Tranches which had 0% delinquency rates earlier in the year are now experiencing almost 30% delinquency rates across their total deal flow,” Viceroy claimed.
In its initial report the short seller noted that U.S. central bank’s policy rate has climbed from about 0% in 2021, to almost 5% in 2023. “This unprecedented and enormous rate hike has derailed even the most bullish projects in the Arbor portfolio,” viceroy stated.
Arbor’s stock was little changed at $12.06 per share in mid-day trading Wednesday. The stock price remains around 10% lower than the last trading day before Viceroy issued its first report.