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KBRA Upgrades Three Ratings, Affirms Seven Ratings, and Withdraws One Rating for STWD 2021-FL2

1 May 2026   |   New York

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KBRA upgrades three ratings, affirms seven ratings, and withdraws one rating for STWD 2021-FL2, a CRE CLO transaction with the ability to reinvest principal proceeds for 30 months. The upgrades reflect the transaction’s increased note subordination levels, primarily the result of loan payoffs and principal curtailments. Since the end of the replenishment period in November 2023, 16 loans totaling $700.6 million have paid off in full and three loans (28.7% of current pool balance) have received principal curtailments. This resulted in the notes paying down by $713.5 million (56.0% of the securitization note balance). KBRA also withdraws its AAA (sf) rating on Class A following the reduction of the principal balance of the rated security to zero as reflected in the transaction’s April 2026 remittance report.

At the time of this review, the total collateral balance is $568.5 million, which is comprised of 13 first mortgage loans secured by 20 properties. During the reinvestment period, the issuer was permitted to acquire previously unidentified whole loans and senior participations, provided the assets meet certain specified eligibility criteria. The initial 24-month reinvestment period ended in May 2023, while the replenishment period ended in November 2023.

As of the April 2026 remittance period, there is one loan which is non-performing matured balloon (5.7% of the current pool balance) but has not transferred to the special servicer. KBRA identified seven K-LOCs (54.0%), including the maturity defaulted loan. Of the K-LOCs, three (24.4%) have estimated losses. The K-LOCs are depicted in the table below:

Loss Given Default (000s) Loss Severity 5 1213 Walnut MF $68,970 12.1% N C N Performance $12,987 18.8% 11 Trademark MF $48,680 8.6% N C N Maturity - - 28 Margaritaville Orlando LO $47,004 8.3% N C N Performance - - 17 Galleria Officentre II Portfolio OF $40,000 7.0% N C N Maturity - - 16 Towers at West End OF $40,000 7.0% N C N Occupancy $9,199 23.0% 15 Park Fifth MF $32,294 5.7% N NPM N Maturity - - 19 700 Louisiana and 600 Prairie Street OF $30,000 5.3% N C Y Occupancy $6,643 22.1% Total K-LOCs $306,949 54.0% $28,829 1. K-LOC Date is the date when the most recent K-LOC was initially determined. 2. Loss Given Default assumes a 100% probability of default (PD). KBRA may determine a lower PD when estimating losses to a transaction. KBRA Estimated 2 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 112.4%, compared to 140.7% at last review and 125.0% at securitization. The KDSC at Index Cap is 1.15x, compared to 1.30x at last review and 1.11x at securitization. The overcollateralization and interest coverage tests have each been satisfied during each distribution date since issuance.

At securitization, 19 loans (84.4% of the issuance balance) had related companion participations representing unfunded future advance obligations, with an aggregate unfunded amount of $223.5 million. Currently, there are five loans (32.9% of the current balance), with unfunded future advance obligations with an aggregate of $43.3 million unfunded.

Details concerning the classes with ratings changes are as follows:

  • Class B to AA+ (sf) from AA- (sf)
  • Class C to A+ (sf) from A- (sf)
  • Class D to BBB+ (sf) from BBB (sf)

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: 1014634