NewStar Increases Corporate Debt Financing to $100 Million
September 07 2010 - 4:50PM
NewStar Financial Inc. (Nasdaq:NEWS), a specialized commercial
finance company, announced today that it has amended its senior
secured notes with an affiliate of Fortress Investment Group.
Originally issued to provide contingent liquidity, the notes
have been increased and restructured to be used for both growth
capital and liquidity needs.
Key terms of the note agreement have been amended to, among
other things:
- Increase the size to $100 million from $75 million, consisting
of $50 million of revolving notes and $50 million of delayed draw
term notes
- Extend the maturity to August 31, 2014 from July 5, 2013 and
eliminate scheduled commitment reductions
- Reduce borrowing costs to Libor plus 7% from a range of Libor
plus 9% to 12%
- Improve advance rates in the borrowing base for certain key
collateral types
- Establish a discrete pool of collateral to secure the notes,
providing better flexibility to complete additional financings
secured by separate pools of collateral
- Allow for prepayment of the term notes subject to a
"make-whole" premium for the first two years followed by prepayment
fees of 2% and 1% for years three and four, respectively.
- Allow the term notes to be drawn at or before November 29,
2010
"The greater flexibility and lower cost of funding achieved by
this amendment is another important milestone for NewStar as we
focus on growth opportunities. The notes provide ample liquidity
and enhance our ability to commit growth capital where we see
attractive returns," said NewStar CEO, Tim Conway.
"This amendment also adds to our financial flexibility by
permitting us to raise incremental secured debt backed by separate
pools of collateral," said NewStar Treasurer, John Frishkopf.
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 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
and Chicago IL. For more detailed transaction and contact
information, please visit our website at www.newstarfin.com.
The NewStar Financial, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=4044
Forward-Looking Statements:
This press release contains forward-looking statements,
including statements regarding NewStar's liquidity requirements and
the timing of draws under the facility. 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 need for capital and market conditions.
CONTACT: NewStar Financial, Inc.
Corporate Inquiries:
Colleen M. Banse
617.848.2502
cbanse@newstarfin.com
Brian J. Fischesser
617.848.2512
bfischesser@newstarfin.com
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