Proceeds from the transaction will help repay existing credit facilities and support future investments.

October 20, 2025

Transaction Overview

Franklin BSP Realty Trust has completed a $1.076 billion securitization through its subsidiary, BSPRT 2025-FL12 Issuer, LLC. The deal closed on October 15 and involved the sale of approximately $947 million in notes through a private placement—funds the company plans to use to pay down existing credit facilities, finance new loans, and support broader corporate initiatives.

The transaction was structured across nine classes of notes, all tied to commercial and multifamily mortgage assets. Rates for the offered notes range from 1.386% to 3.795% over 1-Month CME Term SOFR. While each class matures in April 2043, initial expectations point to earlier payoffs, with average lives estimated between 3.3 and 4.8 years depending on class.

Collateral and Portfolio Details

The notes are secured by a portfolio of 44 assets: eight real estate loans and thirty-six fully funded senior participations or senior notes. In total, the portfolio carries a principal balance of about $947 million. Ownership of the issuing entity gives Franklin BSP Realty Trust long-term control over the assets, which will be reported on the balance sheet as a financing.

Cash flow from the portfolio will be the primary source of repayment. If it comes up short, no party—including the issuer, its affiliates, or its administrators—is responsible for covering the gap. The transaction is designed to limit recourse and ring-fence risk to the asset pool.

Servicing and Fee Structure

To manage servicing, the issuer brought in two counterparties: Situs Asset Management as the primary servicer and BSP Special Servicer, LLC to handle distressed assets. Both will earn fees tied to loan balances and performance, with incentives built in for workouts and resolutions. Additional provisions cover monthly servicing fees, reporting, and reimbursement of certain expenses.

Redemption Triggers and Defaults

The deal includes several redemption features. Starting in May 2035, notes may be redeemed quarterly, subject to defined conditions. A clean-up call also allows for early redemption if the outstanding balance drops below 10% of the original issuance. Mandatory redemption triggers apply when performance or structural tests are not met. Tax-related events may also prompt full redemption.

Two additional default triggers are worth noting:

• If the issuer or its collateral pool is required to register under the Investment Company Act


• If the issuer loses its status as a qualified REIT subsidiary

These triggers are layered on top of standard defaults and give stakeholders clear guardrails for action.

Strategic Objectives

Franklin BSP Realty Trust’s strategy here is straightforward: keep control of the underlying loans while unlocking capital through secured financing. It’s a targeted approach that supports growth, adds flexibility, and helps the company stay in front of market demand.