BOSTON, Sept. 7, 2010 (GLOBE NEWSWIRE) -- 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.