Welcome Back Lending? A Quick Look at the NewStar CLO
NewStar Financial Inc. last week sold the largest U.S. collateralized loan obligation in more than a year. The Boston-based firm, which lends to middle market buyouts, will use $225 million of the $275 million in proceeds to fund an existing portfolio of loans, allotting the remaining $50 million for originating new financing. The new money will be weighed toward leveraged buyouts, a source familiar with the facility said. That a CLO would sell in this market is encouraging, but the deal wasn't cheap. NewStar got Libor plus 375 on the AAA-rated tranche of its loan, which is expensive, but still lower than the market rate of between Libor plus 550 to 650 for new loans. The AA-rated tranche is priced at Libor plus 750.
12 January 2010•2 mins read
