FS Credit Real Estate Income Trust (FSREI) outlines $350,000,000 MS-1 facility
FS Credit Real Estate Income Trust, Inc. entered into an amended and restated master repurchase and securities contract facility through its subsidiary FS CREIT Finance MS-1 LLC with Morgan Stanley Mortgage Capital Holdings LLC, Morgan Stanley Bank, N.A. and other buyers. The MS-1 Facility provides aggregate purchase price commitments of up to $350,000,000 to finance performing senior commercial and multifamily mortgage loans, A-notes, pari passu participation interests and mezzanine loans. Each transaction accrues price differential at a spread over Term SOFR, and the facility has a termination date of December 9, 2030, with one-year extension options at the administrative agent’s discretion upon satisfaction of conditions.
FS Credit Real Estate Income Trust also entered into an amended and restated guaranty under which it guarantees payment and performance of obligations under the MS-1 Facility, with the guaranty potentially becoming full recourse upon specified events, including certain bankruptcy actions. The agreements include customary covenants requiring, among other things, an EBITDA to interest expense ratio of at least 1.40 to 1.00, total indebtedness to tangible net worth not exceeding 3.50 to 1.00, and minimum liquidity of at least the greater of $15,000,000 or 5% of the aggregate amount outstanding under the facility.
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Insights
Amended $350,000,000 MS-1 facility extends funding while adding leverage and liquidity covenants.
The transaction centers on an amended and restated master repurchase and securities contract facility for up to $350,000,000, used to finance performing senior commercial and multifamily mortgage loans, A-notes, pari passu participations and mezzanine loans. Pricing is set as a spread over Term SOFR, and the stated termination date is December 9, 2030, with potential one-year extensions at the administrative agent’s discretion if conditions are met. This gives the structure a multi-year term profile typical of institutional mortgage loan financing.
FS Credit Real Estate Income Trust supports the structure with an amended and restated guaranty that can become full recourse upon specified events such as certain bankruptcy actions affecting the parent or the special-purpose subsidiary. Financial covenants require an EBITDA to interest expense ratio of at least 1.40 to 1.00, a total indebtedness to tangible net worth ratio not above 3.50 to 1.00, and minimum liquidity of at least the greater of $15,000,000 or 5% of amounts outstanding. The company also identifies this as the creation of a direct financial obligation or an obligation under an off-balance sheet arrangement, so ongoing leverage, interest coverage and liquidity metrics around the MS-1 Facility and the December 9, 2030 termination date are key reference points for future disclosures.
8-K Event Classification
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FAQ
What new financing arrangement did FS Credit Real Estate Income Trust (FSREI) enter into?
FS Credit Real Estate Income Trust, Inc. entered into an amended and restated Master Repurchase and Securities Contract Agreement, known as the MS-1 Facility, through its subsidiary FS CREIT Finance MS-1 LLC with Morgan Stanley Mortgage Capital Holdings LLC, Morgan Stanley Bank, N.A. and other financial institutions.
What is the size and purpose of the MS-1 Facility for FSREI?
The MS-1 Facility provides aggregate purchase price commitments of up to $350,000,000. It is intended to finance the acquisition and origination of Eligible Assets, including performing senior commercial and multifamily mortgage loans, A-notes, pari passu participation interests and mezzanine loans.
How long does the FSREI MS-1 Facility with Morgan Stanley run, and can it be extended?
The MS-1 Facility has a termination date of December 9, 2030. It includes one-year extension options that may be exercised at the administrative agent’s discretion upon satisfaction of specified conditions.
What financial covenants does FS Credit Real Estate Income Trust have under the MS-1 Facility?
Key covenants require FS Credit Real Estate Income Trust to maintain an EBITDA to interest expense ratio of at least 1.40 to 1.00, a total indebtedness to tangible net worth ratio not exceeding 3.50 to 1.00, and minimum liquidity of at least the greater of $15,000,000 or 5% of the aggregate amount outstanding under the MS-1 Facility.
What obligations does FS Credit Real Estate Income Trust guarantee under the MS-1 Facility?
FS Credit Real Estate Income Trust, Inc. entered into an amended and restated Guaranty Agreement under which it guarantees the prompt and complete payment and performance of guaranteed obligations under the MS-1 Facility, subject to specified limitations. The guaranty may become full recourse to the company upon certain events, including the commencement of certain bankruptcy actions involving the company or FS CREIT Finance MS-1 LLC.
How does FSREI classify the obligations created by the MS-1 Facility?
The company states that the MS-1 Facility results in the creation of a direct financial obligation or an obligation under an off-balance sheet arrangement, as described under Item 2.03, with the details of that obligation drawn from the terms outlined for the MS-1 Facility and related guaranty.
UNITED STATES
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FORM
CURRENT REPORT
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Item 1.01 Entry into a Material Definitive Agreement.
On December 9, 2025, FS CREIT Finance MS-1 LLC (“MS-1”), an indirect wholly-owned special-purpose financing subsidiary of FS Credit Real Estate Income Trust, Inc. (“FSCREIT”), entered into an Amended and Restated Master Repurchase and Securities Contract Agreement (the “Repurchase Agreement,” and, together with related documents, the “MS-1 Facility”) with Morgan Stanley Mortgage Capital Holdings LLC, as administrative agent, and Morgan Stanley Bank, N.A. and certain other financial institutions from time to time party thereto, as buyers (collectively, the “Buyers”).
The MS-1 Facility amends and restates in its entirety that certain Master Repurchase and Securities Contract Agreement dated as of October 13, 2022. The MS-1 Facility is intended to finance the acquisition and origination of certain assets which include performing senior commercial and multifamily mortgage loans, A-notes, pari passu participation interests, and mezzanine loans (the “Eligible Assets”). The MS-1 Facility provides for aggregate purchase price commitments of up to $350,000,000. Each transaction under the MS-1 Facility will accrue price differential at a spread over Term SOFR and is subject to customary margin maintenance provisions. The MS-1 Facility has a termination date of December 9, 2030, subject to one-year extension options at the Administrative Agent’s discretion upon satisfaction of specified conditions.
In connection with the Repurchase Agreement, FSCREIT entered into an Amended and Restated Guaranty Agreement (the “Guaranty”) pursuant to which FSCREIT guarantees the prompt and complete payment and performance of the guaranteed obligations when due under the MS-1 Facility, subject to limitations specified therein. The Guaranty may become full recourse to FSCREIT upon the occurrence of certain events, including the commencement of certain bankruptcy actions with respect to FSCREIT or MS-1.
The Repurchase Agreement and Guaranty contain representations, warranties, covenants, events of default and indemnities that are customary for agreements of their type. In addition, FSCREIT is required (i) to maintain its adjusted tangible net worth at an amount not less than 75% of the net cash proceeds of any equity issuance by FSCREIT plus 75% of available capital commitments, minus 75% of the amounts expended for equity redemptions or repurchases by FSCREIT; (ii) to maintain an EBITDA to interest expense ratio not less than 1.40 to 1.00, calculated on a trailing four quarter basis; (iii) to maintain a total indebtedness to tangible net worth ratio that does not exceed 3.50 to 1.00; and (iv) to maintain minimum liquidity at not less than the greater of (x) $15,000,000 and (y) 5% of the aggregate amount outstanding under the MS-1 Facility.
The material terms of the agreements described above are qualified in their entirety by the agreements attached as Exhibits 2.1 and 2.2 to this Current Report on Form 8-K and incorporated herein by reference.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.
The information contained in Item 1.01 of this Current Report on Form 8-K is incorporated by reference into this Item 2.03.
Item 9.01 Exhibits.
| Exhibit No. | Description | |
| 2.1 | Amended and Restated Master Repurchase and Securities Contract Agreement dated as of December 9, 2025 between FS CREIT Finance MS-1 LLC, Morgan Stanley Mortgage Capital Holdings LLC, Morgan Stanley Bank N.A., and certain other financial institutions party thereto. | |
| 2.2 | Guaranty Agreement dated as of December 9, 2025 made by FS Credit Real Estate Income Trust, Inc. in favor of Morgan Stanley Mortgage Capital Holdings LLC on behalf of Buyers. | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| FS Credit Real Estate Income Trust, Inc. | ||
| Date: December 15, 2025 | By: | /s/Stephen S. Sypherd |
| Stephen S. Sypherd | ||
| Vice President, Treasurer & Secretary | ||