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KBRA Assigns Preliminary Ratings to FS Rialto 2021-FL2

·3-min read

Kroll Bond Rating Agency (KBRA) is pleased to announce the assignment of preliminary ratings to eight classes of FS Rialto 2021-FL2, a $783.0 million managed CRE CLO with the ability to reinvest principal proceeds for 24 months, which includes a six-month ramp-up period.

Initially, the transaction will be collateralized by 22 whole loans (or participations therein) with an in-trust balance of $551.8 million and $231.2 million of cash collateral that may be used to purchase three pre-identified delayed-close assets ($156.2 million), and previously unidentified whole loans or participations, 70.0% of which must be secured by multifamily assets and are subject to satisfaction of the eligibility criteria. Should the $156.2 million not be used to acquire the delayed-close loans, it may be used to purchase ramp assets or, after the ramp-up period, applied as principal proceeds to pay down the notes. Additionally, the transaction includes a feature that provides the sponsor with the ability to effectuate significant modifications to performing loans.

This transaction also includes a par value test and an interest coverage test (the note protection tests). If either test is not satisfied on any determination date, on the following payment date, interest proceeds remaining after interest is paid to the Class E notes will be used to pay down the principal balances of the Class A through E notes in sequential order until the tests are satisfied, or the Class A through E notes are paid in full. If available interest proceeds are insufficient to satisfy the tests or pay down the applicable classes of notes, available principal proceeds will be used for such purpose.

Click here to view the report. To access ratings and relevant documents, click here.

Related Publications


Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above.

A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the Information Disclosure Form(s) located here.

Information on the meaning of each rating category can be located here.

Further disclosures relating to this rating action are available in the Information Disclosure Form(s) referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at

About KBRA

Kroll Bond Rating Agency, LLC (KBRA) is a full-service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. Kroll Bond Rating Agency Europe Limited is registered as a CRA with the European Securities and Markets Authority. Kroll Bond Rating Agency UK Limited is registered as a CRA with the UK Financial Conduct Authority pursuant to the Temporary Registration Regime. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider.

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John Triantafyllou, Director (Lead Analyst)
+1 (646) 731-2396

Michael B. Brown, Managing Director
+1 (646) 731-2307

Nitin Bhasin, CFA, Senior Managing Director (Rating Committee Chair)
+1 (646) 731-2334

Susannah Keagle, Senior Director
+1 (646) 731-3357

Christina Moy, Senior Director
+1 (646) 731-4685

Business Development

Michele Patterson, Managing Director
+1 (646) 731-2397