FS Credit REIT Completes $351.8 Million Purchase of Senior Loans

Strategic Insights -

FS Credit Real Estate Income Trust, Inc. (FS Credit REIT), a monthly NAV REIT, has completed the purchase of a diversified portfolio of senior loans from a commercial bank. The $351.8 million portfolio consists of 16 performing floating rate loans with an original weighted average loan-to-value of approximately 61%, an in-place debt yield of over 10%, and a weighted average spread generating an attractive all-in yield. This transaction is indicative of the opportunities arising in the market for alternative lenders like FS Credit REIT as banks and other lenders seek to rebalance their CRE holdings.

Key Takeaways:

  • FS Credit REIT has completed the purchase of a $351.8 million portfolio of senior loans from a commercial bank, expanding its existing portfolio.
  • The portfolio consists of 16 performing floating rate loans with an original weighted average loan-to-value of approximately 61%, an in-place debt yield of over 10%, and a weighted average spread that generates an attractive all-in yield.
  • The loan portfolio is highly complementary to FS Credit REIT's existing portfolio, and is expected to help continue providing stockholders with an attractive income stream and consistent total returns.
  • FS Credit REIT entered the current cycle with a strong liquidity position, anticipating opportunities to acquire quality assets at highly attractive terms.
  • The transaction is indicative of the structural opportunity in the market for alternative lenders like FS Credit REIT, as banks and other lenders remain constrained or seek to rebalance their CRE holdings.
  • FS Credit REIT's Chief Financial Officer, Chris Condelles, stated that periods of dislocation often present opportunities to acquire quality assets at highly attractive terms.
  • Global Head of Real Estate at FS Investments, Rob Lawrence, believes the loan portfolio is highly complementary to FS Credit REIT's existing portfolio and will help continue providing attractive returns.

Statistics:

  • $351.8 million: the value of the senior loan portfolio acquired by FS Credit REIT
  • 16: the number of performing floating rate loans in the portfolio
  • 61%: the original weighted average loan-to-value of the portfolio
  • 10%: the in-place debt yield of the portfolio
  • Over 10%: the weighted average spread that generates an attractive all-in yield

Sources:

  • FS Credit REIT press release (no date)
  • Chris Condelles, Chief Financial Officer of FS Credit REIT (no date)
  • Rob Lawrence, Global Head of Real Estate at FS Investments (no date)