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NEWS > SEC Filings for NEWS > Form 8-K on 4-Oct-2013All Recent SEC Filings

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Form 8-K for NEWSTAR FINANCIAL, INC.


4-Oct-2013

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


Item 1.01 Entry into a Material Definitive Agreement.

On October 2, 2013, NewStar Financial, Inc. (the "Company") and NewStar CRE Finance I LLC ("NS CRE I"), a financing subsidiary of the Company, entered into the Amended and Restated Master Repurchase Agreement (the "Amended MRA"), by and among NS CRE I as seller, the Company as guarantor and servicer, and Macquarie Bank Limited as the purchaser, which amended and restated the parties Master Repurchase Agreement (the "Original MRA") dated June 7, 2011.

The Amended MRA contains substantially similar terms as the Original MRA, except the Amended MRA extends the maturity date from June 7, 2016 to June 7, 2017, increases the minimum aggregate interest margin payment from $8.2 million to $9.2 million, provides for $25.5 million of additional advances for existing eligible assets owned by the Company, allows for the advance of up to $15.0 million to fund an additional commercial mortgage loan, and releases $41.1 million of principal payments related to previously purchased assets to the Company as unrestricted cash.

The financing arrangement is backed by a portfolio of legacy commercial mortgage loans previously originated by the Company and sold to the purchaser. NS CRE I has agreed to repurchase the mortgage loans from time to time, including a minimum annual amount, with all remaining assets to be repurchased upon maturity of the Amended MRA. Upon its repurchase of a mortgage loan, NS CRE I is obligated to pay the principal amount related to such asset, adjusted as provided in the Amended MRA, plus accrued interest (at a rate based on LIBOR plus a margin) to the date of repurchase. NS CRE I is also obligated to pay a certain minimum yield on the transactions as well as certain administrative costs and expenses incurred by the purchaser. The obligations of NS CRE I are fully guaranteed by the Company. The Company will service the mortgage loans pursuant to the terms of a servicing agreement with the purchaser. In addition, the Amended MRA contains margin call provisions that provide NS CRE I, at its option, the right to transfer cash, additional financial assets or substitute eligible assets to the purchaser or to repurchase one or more mortgage loans to cure any margin deficit resulting from a decline in the assigned value of such assets. The Amended MRA and related guarantee also require NS CRE I and the Company to maintain various financial and other covenants, including the Company maintaining a tangible net worth of at least $400 million, as adjusted from time to time. All other terms and conditions of the Amended MRA and the related guarantee remain the same in all material respects.

The foregoing description is only a summary of certain of the provisions of the Amended MRA and is qualified in its entirety by the full text of the Amended MRA, which is filed as Exhibit 10.1 to this Current Report on Form 8-K, and the full text of the related guarantee, which was filed as Exhibit 10.2 to the Company's Current Report on Form 8-K filed on June 7, 2011.



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

10.1 Amended and Restated Master Repurchase Agreement, dated as of October 2, 2013, by and among NewStar Financial, Inc., Macquarie Bank Limited and NewStar CRE Finance I LLC.


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