NewStar (NEWS) Closes $150M Secured Credit Facility
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NewStar Financial Inc. (Nasdaq: NEWS) 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.
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.
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