Morningstar DBRS Assigns Provisional Credit Ratings to FS Rialto 2026-FL11 Issuer, LLC

DBRS, Inc. (Morningstar DBRS) assigned provisional credit ratings to the following classes of notes (the Notes) to be issued by FS Rialto 2026-FL11 Issuer, LLC (FS RIAL 2026-FL11 or the Issuer):

-- Class A at (P) AAA (sf)
-- Class A-S at (P) AAA (sf)
-- Class B at (P) AA (low) (sf)
-- Class C at (P) A (low) (sf)
-- Class D at (P) BBB (sf)
-- Class E at (P) BBB (low) (sf)
-- Class F at (P) BB (low) (sf)
-- Class F-E at (P) BB (low) (sf)
-- Class F-X at (P) BB (low) (sf)
-- Class G at (P) B (low) (sf)
-- Class G-E at (P) B (low) (sf)
-- Class G-X at (P) B (low) (sf)

All trends are Stable.

The Class F, Class F-E, Class F-X, Class G, Class G-E, and Class G-X Notes are non-offered notes.

The Indenture will allow for the exchange of all or a portion of the Class F Notes or the Class G Notes (the Exchangeable Notes) for proportionate interests in two classes of notes (such Notes received in such an exchange, the Exchanged Notes) as follows: (1) the Class F Notes may be exchanged for proportionate interests in the Class F-E Notes and the Class F-X Notes and (2) the Class G Notes may be exchanged for proportionate interests in the Class G-E Notes (collectively with the Class F-E Notes, the Exchanged P&I Notes) and the Class G-X Notes (collectively with the Class F-X Notes, the Exchanged Interest Only Notes).

The FS Rialto2026-FL11 transaction's initial collateral consists of 23 floating-rate mortgage loans secured by 32 transitional multifamily, mixed-use, industrial, hotel, retail, and office properties. The collateral is encumbered by $2.1 billion of debt, composed of $1.0 billion that will be owned by the Issuer, $127.2 million of future funding, and $889.4 million of funded pari passu debt. Eleven loans, comprising 45.1% of the pool, are structured with future funding of $127.2 million.

The transaction is a managed vehicle, which includes a 36-month reinvestment period. Reinvestment of principal proceeds during the reinvestment period is subject to eligibility criteria, which, among other criteria, includes a rating agency no-downgrade confirmation (RAC) by Morningstar DBRS Morningstar DBRS will confirm that a proposed action, failure to act, or other specified event will not, in and of itself, result in the downgrade or withdrawal of the current credit ratings during the reinvestment period. All tables, charts, and metrics referenced in this report reflect the $1.0 billion initial pool and cut-off balance.

The holder of the future funding companion participations will be FS CREIT Finance Holdings LLC (the Seller), a wholly owned subsidiary of FS Credit Real Estate Income Trust, Inc., or an affiliate of the Seller. The holder of each future funding participation has full responsibility to fund the future funding companion participations. The collateral pool for the transaction is managed with a 36-month reinvestment period. During this period, the Collateral Manager will be permitted to acquire reinvestment collateral interests, which may include Funded Companion Participations, subject to the satisfaction of the Eligibility Criteria and the Acquisition Criteria. The Acquisition Criteria requires that, among other things, the Note Protection Tests are satisfied, no event of default is continuing, and Rialto Capital Management, LLC or one of its affiliates acts as the subadvisor to the Collateral Manager. The Eligibility Criteria has minimum and maximum debt yields and loan-to-value ratios, Herfindahl scores of at least 14.0, and property type limitations, among other items. The transaction stipulates that any acquisition of any reinvestment collateral interests will need an RAC regardless of balance size. The loans are mostly secured by cash flowing assets, many of which are in a period of transition with plans to stabilize and improve the asset value. The transaction will have a sequential-pay structure.

The loans are secured by properties with plans to stabilize and improve the asset value. Eleven of the loans, representing 45.1% of the pool, have remaining future funding totaling $127.2 million. Twelve loans do not have remaining future funding, and the path to stabilization for such loans is primarily based on increasing occupancy and/or achieving operational efficiencies.

All of the loans in the pool have floating rates, and Morningstar DBRS incorporates an interest rate stress that is based on the lower of a Morningstar DBRS stressed rate that corresponds to the remaining fully extended term of the loans or the strike price of an interest rate cap with the respective contractual loan spread added to determine a stressed interest rate over the loan term. When the debt service payments were measured against the Morningstar DBRS As-Is Net Cash Flow, 15 of the 23 loans, representing 67.2% of the initial pool balance, had a Morningstar DBRS As-Is DSCR of below 1.00 times, a threshold indicative of refinance risk. The properties are often transitioning with potential upside in cash flow; however, Morningstar DBRS does not give full credit to the stabilization if there are no holdbacks or if other in-place structural features are insufficient to support such treatment. Furthermore, even with the structure provided, Morningstar DBRS generally does not assume the assets will stabilize above market levels.

Morningstar DBRS' credit ratings on the Notes address the credit risk associated with the identified financial obligations in accordance with the relevant transaction documents. The associated financial obligations are the related Principal Amounts and Interest Distribution amounts for the rated classes.

Morningstar DBRS' credit rating does not address nonpayment risk associated with contractual payment obligations contemplated in the applicable transaction documents that are not financial obligations. For example, the credit ratings do not address nonpayment risk associated with Defaulted and Deferred Interest Distribution Amounts.

Morningstar DBRS' long-term credit ratings provide opinions on risk of default. Morningstar DBRS considers risk of default to be the risk that an issuer will fail to satisfy the financial obligations in accordance with the terms under which a long-term obligation has been issued.

ENVIRONMENTAL, SOCIAL, AND GOVERNANCE CONSIDERATIONS   
There were no Environmental/Social/Governance factors that had a significant or relevant effect on the credit analysis.

A description of how Morningstar DBRS considers ESG factors within the Morningstar DBRS analytical framework can be found in the Morningstar DBRS Criteria: Approach to Environmental, Social, and Governance Factors in Credit Ratings at (May 16,2025): https://dbrs.morningstar.com/research/454196.

All credit ratings are subject to surveillance, which could result in credit ratings being upgraded, downgraded, placed under review, confirmed, or discontinued by Morningstar DBRS.

Notes:
All figures are in U.S. dollars unless otherwise noted.

The principal methodology is Rating and Monitoring North American CMBS Multi-Borrower Transactions (December 31, 2025), https://dbrs.morningstar.com/research/470693.

Other methodologies referenced in this transaction are listed at the end of this press release.

With regard to due diligence services, Morningstar DBRS was provided with the Form ABS Due Diligence-15E (Form-15E), which contains a description of the information that a third party reviewed in conducting the due diligence services and a summary of the findings and conclusions. While due diligence services outlined in Form-15E do not constitute part of Morningstar DBRS' methodology, Morningstar DBRS used the data file outlined in the independent accountant's report in its analysis to determine the credit ratings referenced herein.

The credit rating was initiated at the request of the rated entity.

The rated entity or its related entities did participate in the credit rating process for this credit rating action.

Morningstar DBRS had access to the accounts, management, and other relevant internal documents of the rated entity or its related entities in connection with this credit rating action.

This is a solicited credit rating.

For more information on Morningstar DBRS' policy regarding the solicitation status of credit ratings, please refer to the Credit Ratings Global Policy, which can be found in the Morningstar DBRS Understanding Ratings section of the website: https://dbrs.morningstar.com/understanding-ratings

A provisional credit rating is not a final credit rating with respect to the above-mentioned notes and may change or be different than the final credit rating assigned or may be discontinued. The assignment of final credit ratings on the above-mentioned notes is subject to receipt by Morningstar DBRS of all data and/or information and final documentation that Morningstar DBRS deems necessary to finalize the credit ratings.

Morningstar DBRS expects Structured Finance issuers and originators of Structured Finance products to make all relevant information regarding these products available to investors to conduct their own analyses.

Please see the 17g-7 disclosure report and/or the related appendix for additional information regarding the sensitivity of assumptions used in the credit rating process.

As applicable, the conditions that lead to the assignment of a Negative or Positive trend are generally resolved within a 12-month period. Morningstar DBRS' outlooks and credit ratings are monitored.

DBRS, Inc.
22 West Washington Street
Chicago, IL 60602 USA
Tel. +1 312 332-3429

The credit rating methodologies used in the analysis of this transaction can be found at: https://dbrs.morningstar.com/about/methodologies.

-- North American Commercial Mortgage Servicer Rankings (August 22, 2025),
https://dbrs.morningstar.com/research/460923
-- Morningstar DBRS North American Commercial Real Estate Property Analysis Criteria (August 13, 2025), https://dbrs.morningstar.com/research/460471
-- Legal Criteria for U.S. Structured Finance (November 25, 2025),
https://dbrs.morningstar.com/research/468115
-- Interest Rate and Currency Stresses for Global Structured Finance Transactions (September 3, 2025), https://dbrs.morningstar.com/research/461958
-- North American CMBS Insight Model v 1.3.0.0, https://dbrs.morningstar.com/research/470693

For more information on this credit or on this industry, visit https://dbrs.morningstar.com or contact us at [email protected].