Fitch Affirms NewStar Financial's 'CAM2' CDO Asset Manager Rating.

NEW YORK -- Fitch Ratings affirms its 'CAM2' Leveraged Loan CDO asset manager rating for NewStar Financial (NewStar). The rating is based on the organization's nationally focused approach to middle market commercial finance origination, experienced management team, and solid capital base as reflected by the group's $2 billion of committed equity and debt capital. E[acute accent]NewStar is comprised of three segments: Corporate Middle Market (60% of target total assets), Commercial Real Estate (20%) and Structured Products (20%). NewStar's structured finance business is responsible for the company's two financing CLOs, NewStar Trust 2005-1 and NewStar Trust 2006-1. The group directly originates proprietary deal flows in these three markets and structures customized loans to meet their customers' requirements. The group has approximately $1.8 billion of committed debt capital raised from lenders and institutional investors as well as $360 million of equity capital from institutional investors and management. This capital base supports NewStar's long-term commitment to the middle market. E[acute accent]NewStar's 'CAM2' rating is based on NewStar's composite score of '2.12' which represents a weighted average score based on the scores assigned for each group of criteria factors summarized as follows:

E[acute accent]-- Company and Management Experience '2.50';

E[acute accent]-- Staffing '1.50';

E[acute accent]-- Procedures and Controls '2.00';

E[acute accent]-- Portfolio Management '1.50';

E[acute accent]-- CDO Administration '1.50';

E[acute accent]-- Technology '1.75';

E[acute accent]-- CDO Portfolio Performance 'Not Scored'.

E[acute accent]NewStar's composite score of '2.12' is used to establish a systematically applied quantitative link between its asset manager rating and Fitch's CDO rating criteria, in accordance with the approach outlined in Fitch Research on 'Reviewing and Rating CDO Asset Managers,' dated Jan. 27, 2006, available on the Fitch Rating's web site at www.fitchratings.com. E[acute accent]NewStar is a specialty finance company that was formed in June 2004. The company focuses on the corporate middle market, real estate and structured finance markets. As of March 31, 2006, NewStar managed assets of $973 million on a funded basis and $1.15 billion on a committed basis. The group currently has 85 employees and has offices in Connecticut, San Francisco, Chicago, and South Carolina, in addition to their headquarters in Boston, MA. E[acute accent]Fitch rates CDO asset managers by asset class, on a scale of 1 to 5, with 1 being the highest rating. These ratings are based on a standardized scorecard methodology that includes factors in each of the seven groups as noted above.

E[acute accent]Fitch's rating definitions and the terms of use of such ratings are available on the agency's public site, www.fitchratings.com. Published ratings, criteria and methodologies are available from this site, at all times. Fitch's code of conduct, confidentiality, conflicts of interest, affiliate firewall, compliance and other relevant policies and procedures are also available from the 'Code of Conduct' section of this site.