show menu
close menu
LinkedIn icon

Fitch Rates NewStar Financial CDO Asset Manager Rating 'CAM2'

Download pdf Download PDF



Fitch Ratings - New York, NY, June 6, 2005 - Fitch Ratings has assigned NewStar Financial, Inc. (NewStar) a 'CAM2' Leveraged Loan CDO Asset Manager rating. This rating is based on NewStar's strengths as a middle-market CLO manager, which include the company's seasoned and deep management team, significant build-out of its operating processes and related infrastructure, and its well-capitalized financial standings. Further, the company has made substantial investments in operations, administration, acounting control functions, and facilities. Although the company is newly established and is in the process of ramping up production in its corporate lending unit, Fitch's review of NewStar's credit underwriting processes and loan file documentation indicate well-conceived practices in credit underwriting and loan administration.



NewStar's scores for each group of criteria factors are summarized as follows:



  • Company and Management Experience 3.00;
  • Staffing 1.50;
  • Procedures and Controls 2.00;
  • Portfolio Management 1.50;
  • CDO Administration 1.50;
  • Technology 1.75;
  • CDO Portfolio Performance - Not scored due to lack of seasoning.



NewStar's composite score of 2.24 is used to establish a systematically applied quantitative link between its asset manager rating and Fitch's CDO rating criteria, in accordance with the approach outlined in Fitch's report on 'Rating CDO Asset Managers,' dated Feb. 3, 2005, and available on the Fitch Rating's web site at www.fitchratings.com.



NewStar Financial, Inc. was founded in June 2004 as a finance company, headquartered in Boston, MA, to provide debt capital to mid-sized corporations, real estate borrowers, securities issuers, and asset aggregators. The company was formed by a group of senior banking and capital markets executives from leading financial institutions, including FleetBoston Financial, Citigroup, and JP Morgan Chase. The company began operations after having raised $600 million in capital, of which $210 million represented equity investments from several sponsors specializing in investments in financial services companies. More recently, in April 2005, the company completed a $50 million offering of long-term senior secured notes, increasing the company's lending capacity to approximately $2 billion.



Fitch rates CDO asset managers by asset class, on a scale of 1 to 5, with 1 being the highest rating. These ratings are based on a standardized scorecard methodology that includes factors in each of the seven groups noted above. Also available on the web site is information on Fitch's review and rating process for CDO Asset Managers ('Rating CDO Asset Managers', dated Feb. 3, 2005).



Fitch's rating definitions are available on the agency's free of charge web site, www.fitchratings.com. Published ratings, criteria and methodologies, and relevant policies and procedures are also available from this site, at all times. This document will remain on the free site for seven days.



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


Hex divider blue

Copyright 2017 NewStar Financial, Inc. All Rights Reserved. Terms of use.