NewStar Adds $150 Million Credit Facility to Support Continued Loan Growth
Brings Total Warehouse Borrowing Availability to $650 Million and Meets 2012 Financing Needs
BOSTON, Feb. 21, 2012 (GLOBE NEWSWIRE) -- NewStar Financial Inc. (Nasdaq:NEWS), a specialized commercial finance company, announced today that it has closed a $150 million secured credit facility through a financing subsidiary known as NewStar Commercial Funding 2012-1 LLC with an affiliate of Natixis Financial Products LLC. The proceeds will be used to refinance loan collateral previously funded in the company's 2009-1 CLO, as well as other facilities, and provide significant new lending capacity to support growing loan origination volume.
The credit facility is NewStar's fifth warehouse credit line and brings total warehouse borrowing capacity to $650 million, which is expected to satisfy the company's short-term funding requirements for loan growth in 2012. The hybrid structure of the credit facility combines features of a traditional warehouse financing with the benefits of a single investor term-debt securitization (CLO). The credit facility has an eighteen month reinvestment period, during which time advances may be drawn, repaid and redrawn. Borrowings under the credit facility are to be repaid over the seven-year term of the loan, which matures in February 2019, matching the projected duration of the underlying loan collateral. Advances under the credit facility were rated Aa2 by Moody's and are secured primarily by middle-market, first-lien senior secured corporate loans. Advances under the credit facility are
limited to approximately 65% of eligible collateral and bear interest at the lender's commercial paper (CP) rate plus 205 bps. The facility may be prepaid and is expected to be refinanced through the issuance of CLO notes.
"This new credit facility brings our total current lending capacity to nearly $1 billion and positions us to meet our growth objectives in 2012," said NewStar CEO Tim Conway. "The attractive terms of the financing reflect the quality of NewStar's credit performance and track record, as well as the strength of the company's origination capabilities across our specialized lending businesses. Natixis has been a valued partner for NewStar since our inception and we are excited to continue expanding that relationship with this deal," he added.
"The hybrid structure of this financing provides us with valuable flexibility," said John Frishkopf, treasurer of NewStar. "The company benefits from a low cost, committed term facility, but, working with Natixis, we have the option to refinance the debt through the issuance of bonds in the CLO market at a later date in order to achieve better terms," Frishkopf added.Forward-Looking Statements:
This press release contains forward-looking statements, including statements regarding NewStar's application of the net proceeds from the warehouse facility; projected duration of loan collateral underlying the warehouse facility; and the ability of NewStar to meet its expected short-term funding requirements for 2012. These forward-looking statements involve a number of risks and uncertainties. Among the important factors that could cause actual results to differ materially from those results indicated in the forward-looking statements include uncertainties relating to future events that could affect its intended application of net proceeds and market conditions that could affect its underlying loans and ability to fund loan growth.About NewStar Financial, Inc.:
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 a range of senior secured debt financing options to mid-sized companies to fund working capital, growth strategies, acquisitions and recapitalizations, as well as equipment purchases. NewStar originates loans and leases directly through teams of experienced, senior bankers and marketing officers organized around key industry and market segments. The Company targets 'hold' positions of up to $30 million and will selectively underwrite or arrange larger transactions for syndication to other lenders. NewStar is headquartered in Boston MA and has regional offices in Atlanta GA, Chicago IL, Dallas TX, Darien CT, Los Angeles CA, Philadelphia PA, Portland OR, San Francisco
CA. Please visit our website at www.newstarfin.com for more detailed information.
The NewStar Financial, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=4044CONTACT: Corporate Inquiries:
Robert K. Brown