NewStar Financial has amended its warehouse line of credit with Wachovia Bank, a Wells Fargo company, to convert it into a $145.7 million, three-year, secured term debt facility that better matches the maturity profile of the assets it funds.
The credit facility has been structured to finance a static pool of existing loans totaling approximately $228.4 million, which is expected to generate sufficient cash flow from interest and principal collections to repay the loan over its term.
John Bray, CFO at NewStar, said: “We are pleased to announce the amendment of this credit facility which substantially reduces perceived financing risk by extending the term and better matching the maturity profile of the assets it finances. It provides us the flexibility needed to retire the debt and monetize our investment in this loan portfolio. Approximately 87% of our loan portfolio is now funded with long term debt and equity capital.”
John Frishkopf, Treasurer at NewStar, said: “This amendment demonstrates the strong relationship we have had with Wachovia, and now Wells Fargo, since NewStar was established. It is a partnership that we highly value and have continued to expand.”
Boston-based NewStar Financial offers senior secured debt financing for the acquisition or recapitalization of mid-sized companies and commercial real estate.
