NewStar Financial reported total new funded loan volume was approximately $319 million in Q2/13 compared to $147 million in the prior quarter and $205 million in the Q2/12. The company noted that higher volumes reflected an increase in demand for acquisition financing from financial sponsors amid a pickup in M&A activity following a slow first quarter.

Highlights from the NewStar news release included the following:

  • The managed loan portfolio remained steady at $2.4 billion as of June 30, 2013 approximately equal to March 31, 2013 as new funded loan origination was largely offset by loan run-off from scheduled amortization and an elevated level of prepayments of existing loans.
  • The leveraged finance loan portfolio, excluding the $85 million of loans in the Arlington Fund, decreased by $32 million during the second quarter of 2013 to approximately $1.5 billion, while asset-based loans and leases in our business credit portfolio declined $3.6 million to $201 million.
  • Formed a new managed credit fund to co-invest in middle-market commercial loans originated by NewStar. The fund is expected to be $300 million when fully invested and its financial results are now reported on a consolidated basis in NewStar’s financial statements.
  • Asset-based lending and equipment finance business lines originated approximately $9 million in the second quarter of 2013, or 3% of new loan volume retained on the balance sheet.
  • Refinanced $100 million of higher cost debt through new $200 million institutional term debt financing rated BB- by S&P.

    • “We made significant progress on our key objectives this quarter. New loan volume rebounded strongly as M&A activity picked up and our productivity improved with the addition of three new bankers. We expanded our asset management activities with the launch of a new credit fund and completed a $200 million debt financing,” said Tim Conway, NewStar’s chairman and chief executive officer. “Revenue grew, margins widened and our stock has performed well as developments in the market reinforce the value of asset origination platforms like NewStar,” he concluded.

    To read the entire NewStar Financial news release, click here.