FSREI secures up to $500M CO-1 repo financing capacity
FS Credit Real Estate Income Trust, Inc. entered into a new Master Repurchase and Securities Contract Agreement through its special-purpose subsidiary FS CREIT Finance CO-1 LLC with Capital One, National Association. The CO-1 Facility provides aggregate purchase price commitments of up to $350,000,000, with optional increases up to $500,000,000 at the buyer’s discretion, to finance performing senior commercial and multifamily mortgage loans, A-notes, pari passu participations and mezzanine loans.
The facility’s availability period runs through November 19, 2026, with two one-year extension options and a potential term-out feature tied to the maturity of remaining assets. FS CREIT provided a Guaranty that can become full recourse upon certain events, including specified bankruptcy actions. Covenants require minimum liquidity of at least $15,000,000 or 5% of the CO-1 Facility balance, an EBITDA-to-interest ratio of at least 1.40x, and a total debt-to-tangible net worth ratio not exceeding 3.50x.
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Insights
FS CREIT adds sizable repo capacity with structured covenants.
FS Credit Real Estate Income Trust, Inc. has arranged the CO-1 Facility, a Master Repurchase and Securities Contract Agreement with Capital One, National Association, providing up to $350,000,000 in purchase price commitments, expandable to $500,000,000. This facility is designed to finance performing senior commercial and multifamily mortgage loans, A-notes, pari passu participations and mezzanine loans, aligning the funding source with the underlying asset profile.
The availability period extends to November 19, 2026, with two one-year extension options and an additional term-out feature that can align the facility’s end date with the latest maturity of remaining purchased assets. Pricing is based on a spread over Term SOFR, and the structure includes customary margin maintenance, meaning collateral values and performance will influence ongoing borrowing capacity.
FS CREIT has provided a Guaranty for the CO-1 Facility, which can become full recourse upon certain events such as specified bankruptcy actions. Financial covenants require 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 the greater of $15,000,000 or 5% of outstanding facility balances. These tests frame leverage, coverage and liquidity expectations that will be reflected in future financial disclosures.
8-K Event Classification
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Item 1.01 Entry into a Material Definitive Agreement.
On November 19, 2025, FS CREIT Finance CO-1 LLC (“CO-1”), an indirect wholly owned special-purpose financing subsidiary of FS Credit Real Estate Income Trust, Inc. (“FS CREIT”), entered into a Master Repurchase and Securities Contract Agreement (the “Repurchase Agreement,” and together with the related transaction documents, the “CO-1 Facility”), as seller, with Capital One, National Association, as buyer (the “Buyer”), 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 facility provides for aggregate purchase price commitments of up to $350,000,000, with optional increases up to $500,000,000 at Buyer’s discretion. Each transaction under the facility will accrue price differential at a spread over Term SOFR and is subject to customary margin maintenance provisions. The availability period under the facility expires on November 19, 2026, with two one-year extension options and a potential term-out feature allowing for extension to the date that is two business days prior to the latest maturity date of the remaining purchased assets, if the term out period is elected.
In connection with the Repurchase Agreement, FS CREIT entered into a Guaranty Agreement (the “Guaranty”) pursuant to which FS CREIT guarantees the prompt and complete payment and performance of the guaranteed obligations when due under the CO-1 Facility, subject to limitations specified therein. The Guaranty may become full recourse to FS CREIT upon the occurrence of certain events, including the commencement of certain bankruptcy actions with respect to FS CREIT or CO-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, FS CREIT 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 FS CREIT minus 75% of the amounts expended for equity redemptions or repurchases by FS CREIT; (ii) to maintain an EBITDA to interest expense ratio not less than 1.40 to 1.00; (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 CO-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 | Master Repurchase and Securities Contract Agreement dated as of November 19, 2025 between FS CREIT Finance CO-1 LLC, and Capital One, National Association. | |
| 2.2 | Guaranty Agreement dated as of November 19, 2025 made by FS Credit Real Estate Income Trust, Inc. in favor of Capital One, National Association. | |
| 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: November 24, 2025 | By: | /s/Stephen S. Sypherd |
| Stephen S. Sypherd | ||
| Vice President, Treasurer & Secretary | ||