NewStar Adds $150 Million Credit Facility to Support Continued Loan Growth
February 21 2012 - 4:12PM
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=4044
CONTACT: Corporate Inquiries:
NewStar Financial
Robert K. Brown
(617) 848-2558
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