NewStar expands middle-market commercial loan program to $400 million

By Toni Weeks

San Luis Obispo, Calif., July 2 – NewStar Arlington Senior Loan Program LLC has expanded its loan program to $400 million from the original target of $300 million, according to an 8-K filed with the Securities and Exchange Commission by NewStar Financial, Inc., the company’s collateral manager.

The program was initiated in April 2013 to co-invest in middle-market commercial loans.

The program expansion is expected to add to assets under management as the proceeds are invested. It also provides benefits to NewStar, including increasing lending capacity, which allows it to provide more capital to clients while managing risk exposure.

NewStar also announced that on June 26 it completed a $409.4 million term debt securitization to provide leverage to the senior loan program, potentially magnifying returns to investors. According to the filing, a portion was used to repay outstanding debt under a $175 million warehouse facility. Additional proceeds will be used to fund future loan originations and acquisitions.

The middle market commercial lender is based in Boston.

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