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NewStar Completes Final Closing of Previously Announced Private Placement of Common Stock

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Boston, January 21, 2008 – NewStar Financial, Inc. (NASDAQ: NEWS), a Boston-based specialty finance company, announced today that it has completed its previously announced private placement of 12.5 million shares of common stock, which was priced at $10.00 per share. The second closing of the transaction was subject to the approval of NewStar stockholders, which was obtained at a Special Meeting of Stockholders held on January 15, 2008. At the second closing, the company issued approximately 5.25 million shares of common stock and received gross proceeds of approximately $52.5 million. At the initial closing of the private placement on November 29, 2007, the company issued approximately 7.25 million shares of common stock and received gross proceeds of approximately $72.5 million. Investors in the transaction include founding shareholders, Corsair Capital, Union Square Partners and Och-Ziff Capital Management, as well as outside investors Swiss Re and SAB Capital. The securities offered in this placement have not been registered under the Securities Act of 1933, as amended or state securities laws, and cannot be offered or sold in the United States absent registration with the Securities and Exchange Commission or an applicable exemption from the registration requirements. As part of the transaction, NewStar has agreed to file a registration statement with the SEC covering the resale of the shares of common stock issued in the offering. This press release is neither an offer to sell nor a solicitation of an offer to buy any of the securities discussed herein and shall not constitute an offer, solicitation or sale in any jurisdiction in which such offer, solicitation or sale is unlawful.
About NewStar Financial
NewStar Financial (NASDAQ:NEWS) is a specialized commercial finance company focused on meeting the complex financing needs of companies and private investors in the middle markets. The Company specializes in providing senior secured debt financing for the acquisition or recapitalization of mid-sized companies and commercial real estate. NewStar originates loans directly through a team of experienced, senior bankers organized around key industry and market segments. The Company targets 'hold' positions of up to $20 million and selectively underwrites or arranges larger transactions for syndication to other lenders. NewStar is headquartered in Boston MA and has regional offices in Darien CT, Chicago IL, San Francisco CA, San Diego CA, and Charleston SC. For more detailed transaction and contact information please visit www.newstarfin.com.Contact:
Anne G. Bork
617.848.4318
abork@newstarfin.com
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