Boston, MA, June 8, 2006 - NewStar Financial Inc., a nationally focused specialty finance company, announced that it has priced and closed a $500 million collateralized loan obligation (CLO). The NewStar Commercial Loan Trust 2006-1 CLO is secured by a diversified portfolio of exclusively middle market assets originated by NewStar, primarily first lien loans. This is NewStar's second CLO. The NewStar Commercial Loan Trust 2005-1 was completed in August of 2005 for $375 million.
"This is another benchmark transaction for NewStar, one that highlights the value of our extensive direct origination capabilities as well as our strong credit culture," said NewStar CEO, Tim Conway.
"The CLO structure provides attractive term financing for our balance sheet assets and NewStar intends to continue to be a programmatic issuer in the CLO market. This important transaction significantly expands our investor base and gives us greater flexibility and strength as we begin our third year of operation," said John Frishkopf, head of asset management at NewStar.
NewStar Financial, located in Boston, will act as the manager of the CLO, which has a five-year reinvestment period. NewStar retains the CLO equity, which comprises the portfolio first loss risk below the BBB- level.
Chris Pink, Head of Structured Products Syndicate at Wachovia Securities noted "The oversubscription and execution levels demonstrate that investors saw real value across the capital stack". Wachovia Securities and Citigroup acted as joint book runners, with Wachovia as structuring agent. Harris Nesbitt was co-manager on the transaction. The bonds were heavily oversubscribed, with some classes as much as seven times. The Class A through E notes are rated by three rating agencies. The blended pricing for the 2006-1 notes was LIBOR plus 0.41%.
About NewStar Financial, Inc.:
NewStar Financial, Inc. was formed in June 2004 by a group of senior banking and capital markets executives from leading financial institutions, including FleetBoston Financial, Citigroup and JP Morgan Chase, and leading institutional investors including Capital Z Partners, JP Morgan Corsair Capital Partners and Och-Ziff Capital Management Group. NewStar is focused exclusively on providing customized financing solutions to mid-sized borrowers in three lending groups: Middle Market Corporate, Commercial Real Estate, and Structured Products. For more information, please contact the appropriate individual below.
Gaffney Bennett Public Relations