Content area
Full text
NewStar Financial Inc. entered into an investment agreement, dated Nov. 4, with three investment funds advised by Franklin Square Capital Partners and subadvised by an affiliate of GSO Capital Partners LP.
The investment agreement provides for the Franklin-advised investment funds to purchase from NewStar $300 million principal amount of its subordinated notes and warrants to purchase 12 million common shares. An initial closing for the sale of $200 million principal amount of notes and warrants to purchase 9.5 million common shares, or the first tranche warrants, is expected to occur Dec. 31, subject to customary closing conditions. The issuance of the remaining warrants, or the second tranche warrants, as well as the removal of certain ownership restrictions contained in the first tranche warrants, are subject to NewStar stockholders' approval.
The sale of the remaining $100 million principal amount of notes to the Franklin-advised investment funds will occur in subsequent closings during the year following Dec. 31, in each case at the election of NewStar and in tranches of at least $25 million principal amount of notes. The notes will be sold to the Franklin-advised investment funds for a purchase price equal to 98% of their principal amount.
The Franklin-advised investment funds have agreed to certain...