Press Release|CMBS
View PDF

KBRA Affirms All Ratings for FS Rialto 2021-FL2

10 Jul 2026   |   New York

Contacts

KBRA affirms all of its outstanding ratings for FS Rialto 2021-FL2, a CRE CLO transaction with a 24-month reinvestment period. The reinvestment period ended in April 2023, as expected. The affirmations follow a surveillance review of the transaction, which has exhibited continued deleveraging since the end of the reinvestment period. However, the transaction has exhibited a worsening in collateral performance since last review, including the addition of specially serviced assets, K-LOCs, and delays in business plans of trust assets.

At the time of this review, the total collateral balance is $432.2 million, which is comprised of 16 first mortgage loans secured by 22 properties. As of the June 2026 remittance period, there are six specially serviced assets (39.7% of the current pool balance), which include three REO assets (21.6%). KBRA identified eight K-LOCs (57.0%), which include the specially serviced assets. Five of the K-LOCs (35.7%) have estimated losses. The K-LOCs are depicted in the table below:

Loss Given Default (000s) Loss Severity 33 Park West Dallas OF $62,515 14.5% N C Y Occupancy $7,749 12.4% 34 Grace Chamblee MF $40,903 9.5% Y NPM Y REO - - 8 The 903 Apartments MF $34,397 8.0% Y NPM N REO $7,197 20.9% 7 18220 Liberty IN $33,414 7.7% Y C Y Specially Serviced - - 31 Montecito Apartments MF $27,372 6.3% Y C N Specially Serviced $3,029 11.1% 27 University City Portfolio MF $17,892 4.1% Y NPM Y REO $8,416 47.0% 18 1000 Jefferson IN $17,690 4.1% Y C Y Specially Serviced - - 21 8378 Melrose Ave MU $12,000 2.8% N C Y Occupancy $1,300 10.8% Total K-LOCs $246,184 57.0% $27,692 1. Loss Given Default assumes a 100% probability of default (PD). KBRA may determine a lower PD when estimating losses to a transaction. KBRA Estimated 1 K-LOCs Prosp. ID Loan Name Prop Type Current In-Trust Balance (000s) % of Deal Balance SS Loan Status Mod (Y/N) Primary K-LOC Reason
Source: KBRA

The transaction’s WA KLTV is 128.4%, compared to 127.9% at last review and 128.1% at securitization. The KDSC at Index Cap is 1.05x, compared to 1.15x at last review and 1.08x at securitization. The overcollateralization and interest coverage tests have each been satisfied during each distribution date since issuance.

At securitization, 19 loans (77.2% of the issuance loan pool) had related companion participations representing unfunded future advance obligations, with an aggregate unfunded amount of $88.9 million. In total, there are currently eight loans (51.8% of the current balance) with unfunded future advance obligations with an aggregate of $35.0 million unfunded.

To access ratings and relevant documents, click here.

Click here to view the report.

Related Publication

Methodologies

Disclosures

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 www.kbra.com.

About KBRA

Kroll Bond Rating Agency, LLC (KBRA), one of the major credit rating agencies (CRA), is a full-service CRA 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. In addition, KBRA is designated as a Designated Rating Organization (DRO) by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized as a Qualified Rating Agency by Taiwan’s Financial Supervisory Commission and is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider (CRP) in the U.S.

Doc ID: 1015855