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NewStar Financial Serves as Sole Lender for Acquisition by Primus Capital Funds

NewStar provides financing for Healthcare Management Systems, Inc.

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Boston, MA, October 15, 2007 – NewStar Financial, Inc. (NASDAQ: NEWS), a Boston-based specialty finance company, announces that it is the Sole Lender on a new financing to support the acquisition of Healthcare Management Systems, Inc. ("HMS") by Primus Capital Funds ("Primus"). Founded in 1983, Primus is a private equity firm that invests in growth capital opportunities, recapitalizations and management-led buyouts. Primus has raised $620 million across five private equity funds and has invested in over 120 companies. Although experienced in a number of industries, Primus places an increased emphasis on the business services, healthcare, for-profit education and communications sectors.Phillip Molner, Managing Director at Primus, said, "We are pleased to work with a lender who understands our business and our needs moving forward. NewStar worked with us to structure a debt package that provides HMS the flexibility to achieve our short-term and long-term goals."Healthcare Management Systems is a Nashville, Tennessee-based healthcare company that provides an information technology system that integrates clinical and financial applications on a single IBM platform to over 500 community hospitals nationwide. Since 1984, the HMS system has helped caregivers deliver quality care at the right time and place with an emphasis on improving patient safety and financial performance."We are excited to complete our first transaction with Primus and look forward to working with HMS, a leading software provider in the niche community hospital IT space," said Greg Pachus, Managing Director and Head of NewStar's Healthcare Team.NewStar's deal team included Greg Pachus, Walter Marullo, Keith Cox, Levi Richardson, Dipen Patel and Jon Bassett.About NewStar Financial, Inc.:

NewStar Financial is a specialized commercial finance company focused principally on meeting the complex financing needs of customers in the middle market through our corporate, commercial real estate, and structured products groups. Our senior banking teams call directly on customers to provide advice and finance a range of strategic transactions that may require some combination of senior secured, second lien and mezzanine financing. NewStar typically works with customers with financing needs of up to $150 million and cash flow as low as $5 million. We target 'hold' positions of up to $35 million, but may also underwrite or arrange transactions up to $100 million for syndications to other lenders.


We are headquartered in Boston MA, with regional offices in Darien CT, Chicago IL, San Francisco CA, San Diego CA, and Charleston SC. In December of 2006, NewStar completed an Initial Public Offering. The Company's shares trade on the NASDAQ under the ticker symbol, NEWS. Please visit our website at www.newstarfin.com for more detailed transaction and contact information.







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NewStar Financial

Anne G. Bork

(617) 848-4318
Press-Related Inquiries:

Gaffney Bennett Public Relations

Annie Donnelly
(860) 416-1365




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