NewStar Enters Into $125 Million Facility With Wells Fargo to Fund New Origination

NewStar Financial, Inc. NEWS today announced that it has entered into an amended credit facility with Wells Fargo Bank to expand, extend and re-price its existing facility with Wells Fargo and support future loan growth. The financing provides nearly $200 million of lending capacity and flexibility to fund a wider range of lending activity. Advance rates under the credit facility range from 65% to 70% based on the type of loans pledged as collateral. It has a three and one-half year contractual term structured with an 18 month revolving, ramp-up period to support new lending activity, which is followed by a 24 month amortization period. The term structure provides the flexibility to refinance through securitization of the loan pool, extend the revolving period with the mutual consent of both parties, or amortize the facility through its contractual maturity, which reduces potential mis-matches in duration. In addition to favorable changes in those key terms, pricing for the new deal was reduced, reflecting improvement in the funding markets and the purpose of the financing. "This deal represents another important step in our strategy to fund loan growth and re-lever the balance sheet," said Tim Conway, Chairman and Chief Executive Officer. "We are excited to be doing another deal with Wells Fargo and value their relationship with us as a lead bank," he added.