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NewStar Financial Completes $375 Million Loan Securitization

Receives strong reception for first-time issuer

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Boston, MA, August 10, 2005 – NewStar Financial Inc., a Boston-based specialty finance company, announced today that it has priced a $375,000,000 collateralized loan obligation (CLO). The NewStar Trust 2005-1 CLO is secured by a diversified portfolio of middle market, real estate and structured loans originated by NewStar Financial.

“This is an exciting milestone for NewStar, one that validates the quality of our team and the success we’ve enjoyed in our first year,” said NewStar Chief Executive Officer Tim Conway. “This important transaction expands our capital base and gives us greater flexibility and strength as we begin our second year of operation.”

NewStar Financial will act as the manager of the CLO, which has a three-year reinvestment period. Wachovia Securities acted as the lead manager as well as structuring and placement agent. IXIS Securities was co-lead manager and Citigroup was co-manager on the transaction. Mary Katherine Dubose, Managing Director at Wachovia highlighted that “Wachovia was proud to sponsor NewStar’s debut CLO. The NewStar platform was very well received by investors and that is reflected in the strong execution.”

The collateralized loan portfolio is comprised of middle market, syndicated, real estate and structured finance assets. The Class A through E notes are rated by three rating agencies. The blended pricing for the 2005-1 notes was LIBOR plus 0.77%.

Class of Notes

Principal Amount as of

Closing Date

Percentage of all Notes

Note Interest Rate

Ratings (S&P/Moody’s/Fitch)


$156,000,000 41.6% LIBOR+0.28% AAA/Aaa/AAA


$ 80,476,777 21.5% LIBOR+0.30% AAA/Aaa/AAA


$ 18,750,000 5.0% LIBOR+0.50% AA/Aa2/AA


$ 39,375,000 10.5% LIBOR+0.85% A/A2/A


$ 24,375,000 6.5% LIBOR+1.50% BBB/Baa2/BBB


$ 24,375,000 6.5% LIBOR+4.75% BB/Ba2/BB

“The CLO market provides NewStar with efficient term financing and we are pleased with the pricing we achieved on our first transaction. NewStar intends to be a programmatic issuer in the CLO market and this is a great benchmark” noted NewStar’s head of asset management, John Frishkopf.

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.

Corporate Inquiries:

NewStar Financial

Scott Poirier

(617) 848-2525
Press-Related Inquiries:

Gaffney Bennett Public Relations

Chris Riley

(860) 690-0856

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