Franklin BSP Realty Trust, Inc. Announces Closing of a $1.024 Billion CRE CLO

Rhea-AI Summary

Franklin BSP Realty Trust, Inc. (NYSE: FBRT) has announced the closing of BSPRT 2024-FL11 (FL11), a $1.024 billion managed Commercial Real Estate Collateralized Loan Obligation. Key features of FL11 include:

• 36-month reinvestment period
• $100 million all multifamily 180-day ramp-up acquisition period
• Initial advance rate of 86.5%
• Weighted average interest rate of 1M CME Term SOFR+1.99% before discount and transaction costs

FBRT's President, Michael Comparato, highlighted strong investor interest and significant oversubscription across all bond classes. Barclays Capital Inc. served as sole structuring agent, while J.P. Morgan Securities and Wells Fargo Securities acted as co-lead managers and joint bookrunners.

Positive

• Successful closing of a $1.024 billion CRE CLO
• Strong investor interest leading to significant oversubscription across all bond classes
• Active loan origination in the middle market year-to-date
• Support from large institutional investors

Negative

• None.

Insights

Financial Analyst

The closing of a $1.024 billion Commercial Real Estate Collateralized Loan Obligation (CRE CLO) is a significant financial event for Franklin BSP Realty Trust. This transaction demonstrates FBRT's ability to access large-scale funding in the current market environment. Key points to consider:

• The CLO has a 36-month reinvestment period, providing flexibility in managing the underlying loan portfolio.
• An initial advance rate of 86.5% indicates a relatively high leverage, which could enhance returns but also increases risk.
• The weighted average interest rate of 1M CME Term SOFR+1.99% seems competitive in the current market.
• The $100 million all-multifamily ramp-up period suggests a focus on a potentially stable real estate sector.

This transaction likely improves FBRT's liquidity position and could support future loan originations. The oversubscription across all bond classes indicates strong investor confidence in FBRT's portfolio and management.

Real Estate Investment Expert

FBRT's successful closing of FL11 underscores its strong position in the middle-market commercial real estate lending space. The $1.024 billion CLO issuance is substantial, potentially allowing FBRT to expand its loan portfolio significantly. The 36-month reinvestment period is particularly noteworthy as it provides flexibility to adapt to changing market conditions.

The focus on multifamily assets for the ramp-up period is strategic, given the sector's relative stability and strong fundamentals. This could help mitigate risks associated with other potentially volatile commercial real estate sectors. The high advance rate of 86.5% suggests confidence in the underlying collateral quality but also increases the importance of careful risk management.

The oversubscription across all bond classes is a strong vote of confidence from institutional investors, which could positively impact FBRT's future capital-raising efforts and overall market perception.

NEW YORK--(BUSINESS WIRE)-- Franklin BSP Realty Trust, Inc. (NYSE: FBRT) today announced the closing of BSPRT 2024-FL11 (“FL11”), a $1.024 billion managed Commercial Real Estate Collateralized Loan Obligation. FL11 features a 36-month reinvestment period and includes a $100 million, all multifamily 180-day ramp-up acquisition period. The transaction has an initial advance rate of 86.5% and a weighted average interest rate of 1M CME Term SOFR+1.99% before accounting for discount and transaction costs.

Michael Comparato, President of FBRT, commented: “We are excited to announce the successful closing of FL11. Year-to-date, FBRT has been very active originating loans in the middle market, with a meaningful amount of those originations included in the FL11 collateral pool. Strong investor interest led to significant oversubscription across all bond classes, and we are very appreciative of the continued support of our offerings by some of the largest institutional investors in the world.”

Barclays Capital Inc. served as sole structuring agent. J.P. Morgan Securities LLC and Wells Fargo Securities LLC served as co-lead managers and joint bookrunners.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Franklin BSP Realty Trust, Inc.

Franklin BSP Realty Trust, Inc. is a real estate investment trust that originates, acquires and manages a diversified portfolio of commercial real estate debt secured by properties located in the United States. As of June 30, 2024, FBRT had approximately $6.3 billion of assets. FBRT is externally managed by Benefit Street Partners L.L.C., a wholly owned subsidiary of Franklin Resources, Inc. For further information, please visit www.fbrtreit.com.

Forward-Looking Statements

Certain statements included in this press release are forward-looking statements. Those statements include statements regarding the intent, belief or current expectations of FBRT and members of our management team, as well as the assumptions on which such statements are based, and generally are identified by the use of words such as "may," "will," "seeks," "anticipates," "believes," "estimates," "expects," "plans," "intends," "should" or similar expressions. Actual results may differ materially from those contemplated by such forward-looking statements. Further, forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise forward-looking statements to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time, unless required by law.

FBRT’s forward-looking statements are subject to various risks and uncertainties, including but not limited to the risks and important factors contained and identified in FBRT’s filings with the Securities and Exchange Commission (“SEC”), including its Annual Report on Form 10-K for the fiscal year ended December 31, 2023 and its subsequent filings with the SEC, any of which could cause actual results to differ materially from the forward-looking statements. The forward-looking statements included in this communication are made only as of the date hereof.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240926367932/en/

Investor Relations Contact:

Lindsey Crabbe

l.crabbe@benefitstreetpartners.com

(214) 874-2339

Source: Franklin BSP Realty Trust, Inc.

FAQ

What is the size of the CRE CLO closed by Franklin BSP Realty Trust (FBRT)?

Franklin BSP Realty Trust (FBRT) closed a $1.024 billion managed Commercial Real Estate Collateralized Loan Obligation called BSPRT 2024-FL11 (FL11).

What are the key features of FBRT's BSPRT 2024-FL11 CRE CLO?

BSPRT 2024-FL11 features a 36-month reinvestment period, a $100 million all multifamily 180-day ramp-up acquisition period, an initial advance rate of 86.5%, and a weighted average interest rate of 1M CME Term SOFR+1.99% before discount and transaction costs.

Who were the financial institutions involved in FBRT's CRE CLO transaction?

Barclays Capital Inc. served as sole structuring agent, while J.P. Morgan Securities and Wells Fargo Securities acted as co-lead managers and joint bookrunners for FBRT's CRE CLO transaction.

How was the investor response to FBRT's BSPRT 2024-FL11 CRE CLO offering?

According to FBRT's President, Michael Comparato, there was strong investor interest leading to significant oversubscription across all bond classes for the BSPRT 2024-FL11 CRE CLO offering.