FS Credit Real Estate Income Trust, Inc. 8-K

What Happened
FS Credit Real Estate Income Trust, Inc. announced on Feb. 10, 2026 that its subsidiary real estate investment trust, FS Rialto Sub-REIT LLC, and a newly formed issuer, FS Rialto 2026‑FL11 Issuer, LLC, issued a collateralized loan obligation (CLO). The CLO issued nine classes of notes (six offered classes A, A‑S, B, C, D, E and three non‑offered classes F, G, H) with aggregate principal of approximately $1,034,653,076. The transaction is governed by an Indenture dated Feb. 10, 2026 (filed as Exhibit 10.1). Proceeds were used to purchase an initial portfolio of commercial mortgage collateral, repay certain pre‑closing financings (including repurchase facilities), and pay related fees and expenses.

Key Details

• Total issuance: ~$1.035 billion in Notes; Class A = $600,098,000 (58.00% of aggregate), Class A‑S = $150,025,000, Class H = $51,733,076.
• Ratings (Fitch / Morningstar DBRS) for key classes: Class A AAAsf / AAA(sf); Class B AA(low)(sf); Class C A(low)(sf); Class D BBB(sf); Class E BBB(low)(sf); lower classes rated BB/B(low) or unrated.
• Interest: interest accrues to most secured classes off Term SOFR (Benchmark) plus stated spreads (e.g., Class A = Benchmark + 1.45% (plus 0.25% after Dec 2031); Class G = Benchmark + 5.00%); Class H has no stated rate and receives residual cash flows. Maturity at par in January 2044.
• Structure and protections: Secured Notes are payable only from pledged collateral (commercial mortgage loans, accounts and related assets); Class H is unsecured and receives residual distributions. Note protection tests require minimum Par Value ratio 110.58% and Interest Coverage 120.00%; reinvestment period runs through Feb. 2029 (plus up to 60 days for pipeline acquisitions).
• Company retention: an indirect wholly owned subsidiary (FS Rialto 2026‑FL11 Holder, LLC) acquired 100% of the Class E, F, G and H Notes issued at closing. The Notes were not registered under the Securities Act.

Why It Matters
This transaction raises substantial, multi‑year secured financing for the Company’s commercial mortgage portfolio while moving those loans into a securitized vehicle. For investors, the CLO (1) creates a new debt stack with rated senior classes (notably a heavily weighted Class A), (2) leaves the Company/Sub‑REIT retaining several subordinate classes (E/F/G/H), and (3) introduces structural features that can affect cash flow to noteholders (priority of payments, note protection tests, reinvestment period). A tax item to note: the CLO Issuer is likely a “taxable mortgage pool,” which can generate “excess inclusion income” that the Company expects to pay corporate tax on rather than distribute. The Indenture and related documents (filed as Exhibit 10.1) contain the full legal and operational terms.