Fitch Rates NewStar Trust 2005-1.NEW YORK New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of -- Fitch Ratings Fitch Ratings An international rating agency for financial institutions, insurance companies, and corporate, sovereign, and municipal debt. Fitch Ratings has headquarters in New York and London and is wholly owned by FIMALAC of Paris. assigns the following ratings to NewStar Trust 2005-1: -- $156,000,000 class A-1 floating-rate notes Floating-rate note (FRN) Note whose interest payment varies with short-term interest rates. floating-rate note An unsecured debt issue with an interest rate that is reset at specified intervals (usually every six months) according to a due 2018 'AAA'; -- $80,476,777 class A-2 revolving floating-rate notes due 2018 'AAA'; -- $18,750,000 class B floating-rate deferrable interest notes due 2018 'AA'; -- $39,375,000 class C floating-rate deferrable interest notes due 2018 'A'; -- $24,375,000 class D floating-rate deferrable interest notes due 2018 'BBB'; -- $24,375,000 class E floating-rate deferrable interest notes due 2018 'BB'. The ratings are based upon the credit quality of the underlying assets, the credit enhancement Credit Enhancement A method whereby a company attempts to improve its debt or credit worthiness. Notes: Credit enhancements take many different forms. An example of a credit enhancement would be conversion rights added on to a debt instrument in order to lower the issuing provided to the capital structure through subordination and excess spread, and the strength of NewStar Financial, Inc. (rated 'CAM2' by Fitch) as servicer to the portfolio assets. The rating of the class A-1 and A-2 notes addresses the likelihood investors will receive full and timely payments of interest, as well as the stated balance of principal by the legal final maturity date, as per the governing documents. The ratings of the class B, C, D, and E notes address the likelihood investors will receive ultimate and compensating interest payments, as well as the stated balance of principal by the legal final maturity date, as per the governing documents. The notes are supported by the cash flows of an asset portfolio consisting of high yield loans to middle market U.S. businesses, the majority of which are privately owned, real estate loans, large middle-market loans, structured finance loans, and broadly syndicated loans Syndicated Loan A very large loan in which a group of banks work together to provide funds for one borrower. There is usually one lead bank that takes a small percentage of the loan and syndicates the rest to other banks. Notes: Also known as a "syndicated bank facility. . The loans were made for the purpose of working capital, growth, acquisitions, and recapitalizations. The loan obligors primarily operate in the real estate, business services, broadcasting/media/cable, computers/electronics, and health care sectors. The majority of the loans will be senior secured with a maximum of 20.0% of aggregate outstanding loan balance secured by a second lien A Second lien financing is a form of financing secured on a second ranking basis by (more or less) the same security, which secures the first ranking financing. The first lien lenders and the second lien lenders agree that, in the event of a security enforcement or bankruptcy, the on assets. By asset type, the portfolio will be invested in corporate loans (76.8%), real estate loans (19.5%), and structured finance loans (3.6%). The overall portfolio will have a covenanted weighted-average rating of approximately 'B/B-'. The fully ramped portfolio will represent the loan obligations of approximately 48 different obligors. There is some concentration with respect to industry exposure specifically in media, health care, and real estate, which was addressed in the Fitch Vector Model. The largest single obligor The individual who owes another person a certain debt or duty. The term obligor is often used interchangeably with debtor. obligor (ah-bluh-gore) n. exposure is 5.0%. It is important to note that this transaction will feature a three-year reinvestment Reinvestment Using dividends, interest and capital gains earned in an investment or mutual fund to purchase additional shares or units, rather than receiving the distributions in cash. 1. In terms of stocks, it is the reinvestment of dividends to purchase additional shares. period, whereby principal proceeds will be used to fund additional loans. Interest on the notes will be paid sequentially to all of the note classes and pro rata [Latin, Proportionately.] A phrase that describes a division made according to a certain rate, percentage, or share. In a Bankruptcy case, when the debtor is insolvent, creditors generally agree to accept a pro rata share of what is owed to them. between the class A-1 and class A-2 notes, with principal paid on a pro rata basis among all classes prior to the occurrence of a sequential distribution date. Upon the occurrence of a sequential distribution date, an event of default or servicer default, principal will be paid on a sequential basis to all of the note classes, and pro rata between the class A-1 and class A-2 notes. The class F principal-only notes will receive pro rata principal payments, as long as the outstanding collateral balance remains above 75% of the original collateral balance. As part of the rating process for this transaction, Fitch stressed the underlying asset portfolio with a variety of default and interest rate scenarios, designed to simulate varying economic conditions. For further details on the stress tests Fitch employed while rating NewStar Trust 2005-1, see the presale report dated June 30, 2005 on our web site www.fitchratings.com. (For more information on the Fitch Vector Model, see Global Rating Criteria for Collateralised Debt Obligations,' dated Sept. 13, 2004, available on Fitch's web site at www.fitchratings.com.) Fitch's rating definitions and the terms of use Terms of Use are rules set up by the owner of an intellectual property or service to govern how they may be legally used. In many cases, terms of service are used as a contractual agreement between a company and users of a service they provide. 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 Policies and Procedures are a set of documents that describe an organization's policies for operation and the procedures necessary to fulfill the policies. They are often initiated because of some external requirement, such as environmental compliance or other governmental are also available from the 'Code of Conduct' section of this site. |
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