NewStar preps $348.05 million NewStar Commercial Loan Funding SME CLO offering

By Cristal Cody

Tupelo, Miss., Feb. 11 – NewStar Financial, Inc. plans to price $348.05 million of notes due Feb. 25, 2028 in a small-to-middle enterprise collateralized loan obligation transaction, according to a market source.

The NewStar Commercial Loan Funding 2016-1 LLC offering includes $176.5 million of class A-1 senior secured floating-rate notes (Aaa//); $20 million of class A-2 senior secured fixed-rate notes (Aaa//); $36.75 million of class B senior secured floating-rate notes (Aa2//); $22.5 million of class C secured deferrable floating-rate notes (A2//); $23.8 million of class D secured deferrable floating-rate notes (Baa3//); $23 million of class E secured deferrable floating-rate notes (Ba3//) and $45.5 million of membership interests.

Wells Fargo Securities, LLC is the underwriter.

NewStar Financial will manage the CLO.

The CLO has a two-year non-call period and a four-year reinvestment period.

The transaction is backed primarily by small and medium enterprise loans.

NewStar Financial, a Boston-based middle-market commercial lender, priced three CLOs in 2015.

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