NewStar Completes $300 Million Term Debt Financing and Renews $400 Million Credit Facility
Boston, MA, November 9, 2007 NewStar Financial, Inc. (NASDAQ: NEWS), a Boston-based specialty finance company, announced today that it has completed a $300 million term debt financing with Deutsche Bank. NewStar intends to use the proceeds from the transaction to fund new loan origination. After giving effect to the transaction, NewStar will have approximately $775 million of undrawn commitments under its credit facilities and term debt securitizations.
"This is another benchmark transaction for NewStar. Our ability to access capital in these unsettled markets clearly demonstrates the value of our direct origination franchise, disciplined approach to credit and mature business platform," said NewStar CEO, Tim Conway. "With this transaction, we have even greater financial flexibility and are better positioned to capitalize on market opportunities."
The transaction, known as NewStar DB Term Funding, is a debt financing similar to a CLO, which provides NewStar significant flexibility to fund new loans and manage its existing loan portfolio. It has an 18-month investment period during which the company can originate and fund new loans and use principal collections from repayments to invest in additional loan collateral. Following the expiry of the investment period, the transaction will amortize over a 3-year term. The facility has variable advance rates which are expected to be 80% or higher based on the diversification and average rating of the targeted loan collateral. It is pre-payable by the company at any time.
"This financing represents a strong endorsement of our company and another important step in the continued build-out of our diversified funding platform. Deutsche Bank is an important player with a great reputation in this market and we look forward to building the relationship," noted John Frishkopf, NewStar Treasurer and Head of Asset Management.NewStar has also extended the final maturity of its $400 million three-year term credit facility with Citi to November 2010 and completed the annual renewal of the liquidity line that supports that transaction, extending its maturity to November 2008.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.
Anne G. Bork
Gaffney Bennett Public Relations