Daily News: November 6, 2012

Wells Fargo Agents NewStar Facility Increase to $175MM


Commercial finance company NewStar Financial announced it has amended its existing credit facility with Wells Fargo to increase its size by $25 million to $175 million and extend its reinvestment period and final maturity by three years among other things.

The credit facility will be used to provide additional new lending capacity to support growing middle market loan volume originated by NewStar’s Leveraged Finance group.

NewStar said Wells Fargo Securities syndicated the credit facility and serves as administrative agent.

The increase brings total warehouse borrowing capacity to $675 million, which is expected to satisfy the company’s short-term funding requirements for loan growth through 2013. The hybrid structure of the credit facility combines features of a traditional warehouse financing with the benefits of a term-debt securitization.

The credit facility has a three-year reinvestment period, during which time advances may be drawn, repaid and redrawn. Borrowings under the credit facility are to be repaid over the five-year term of the loan, which matures in November 2017, matching the projected duration of the underlying loan collateral. Advances under the credit facility are secured primarily by middle-market, first-lien senior secured corporate loans. Advance rates under the credit facility range from 65% to 70% based on the type of eligible loan collateral.

“Our ability to attract new lenders and increase our credit lines reflects 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,” said NewStar CEO, Tim Conway. “Wells Fargo has been a valued partner for NewStar since our inception and we are excited to continue building on our relationship,” he added.