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NEWS > SEC Filings for NEWS > Form 8-K on 13-Sep-2013All Recent SEC Filings

Show all filings for NEWSTAR FINANCIAL, INC.

Form 8-K for NEWSTAR FINANCIAL, INC.


13-Sep-2013

Entry into a Material Definitive Agreement, Creation of a Direct Financia


Item 1.01 Entry into a Material Definitive Agreement.

On September 11, 2013, NewStar Financial, Inc. (the "Company") completed a $400.0 million term debt securitization. The notes offered in the collateralized loan obligation (the "Notes") were issued by NewStar Commercial Loan Funding 2013-1 LLC, a subsidiary of the Company ("NCLF"), and are backed by a diversified portfolio of commercial loans originated and serviced by the Company. Investors purchased approximately $338.6 million of the floating-rate, asset-backed Notes, representing approximately 85% of the value of the collateral pool. The Company retained all of the Class F Notes, the Class G Notes and the equity, which totaled approximately $61.4 million, representing approximately 15% of the value of the collateral pool. The blended pricing of the Notes was LIBOR plus 2.21%. The reinvestment period is expected to end in September 2016 and the Notes are expected to mature in September 2023.

The amount, ratings and LIBOR spread of the offered Notes are:

                                                                           Assumed
                 Amount              Rating           LIBOR spread         Weighted
    Class    ($ in millions)      (S&P/Moody's)      (basis points)      Average Life
    A-T     $           202.6        AAA/Aaa              1.65            5.3 years
    A-R     $            35.0        AAA/Aaa      See footnote 1 below    5.3 years
    B       $            38.0        AA/N/A               2.30            7.2 years
    C       $            36.0        A/ N/A               3.80            7.6 years
    D       $            21.0        BBB/N/A              4.55            7.9 years
    E       $             6.0       BBB-/N/A              5.30            8.0 years

1 Class A-R Notes will accrue interest at the Class A-R CP Rate so long as they are held by a CP Conduit, and otherwise will accrue interest at the Class A-R LIBOR Rate or, in certain circumstances, the Class A-R Base Rate, but in no event shall interest rate payable pari passu with the Class A-T Notes exceed the Class A-R Waterfall Rate Cap.

In connection with the completion of the term debt securitization, the Company, as transferor, entered into a Master Loan Sale Agreement, dated as of September 11, 2013, with NCLF as issuer and NewStar Commercial Loan Depositor 2013-1 LLC, a newly formed subsidiary of the Company, as depositor. The Company, as collateral manager, also entered into a Collateral Management Agreement dated as of September 11, 2013, with NCLF as Issuer. In addition, NCLF entered into an Indenture, dated as of September 11, 2013, with U.S. Bank National Association as trustee. The Master Loan Sale Agreement, the Collateral Management Agreement, and the Indenture require the Company and NCLF to comply with various covenants and contain events of default and collateral manager termination events, which are subject to certain materiality thresholds and grace and cure periods, customary for securitizations of this type. The Master Loan Sale Agreement, the Collateral Management Agreement, and the Indenture are filed with this report as Exhibits 10.1, 10.2, and 4.1, respectively, and the foregoing descriptions of these documents do not purport to be complete and are qualified in their entirety by the full text set forth in those exhibits, which are incorporated herein by this reference. On September 13, 2013, the Company issued a press release announcing the completion of the term debt securitization. The press release is attached hereto as Exhibit 99.1 and incorporated herein by reference.

The Notes were sold within the United States only to qualified institutional buyers in reliance on Rule 144A under the Securities Act of 1933, as amended (the "Securities Act"). The Notes have not been registered under the Securities Act or any state securities laws, and, unless so registered, the Notes may not be offered or sold in the United States or to U.S. persons except pursuant to an exemption from the registration requirements of the Securities Act and applicable state securities laws.



Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

The information set forth in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference.



ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits

 4.1     Indenture by and between NewStar Commercial Loan Funding 2013-1 LLC, as
         Issuer, and U.S. Bank National Association, as Trustee, dated as of
         September 11, 2013.

10.1     Master Loan Sale Agreement by and between the Company, as Transferor,
         NewStar Commercial Loan Depositor 2013-1 LLC, as Depositor, and NewStar
         Commercial Loan Funding 2013-1 LLC, as Issuer, dated as of September 11,
         2013.

10.2     Collateral Management Agreement by and between the Company, as Collateral
         Manager, and NewStar Commercial Loan Funding 2013-1 LLC, as Issuer, dated
         as of September 11, 2013.

99.1     Press release of the Company, dated September 13, 2013.


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