Bloomberg News

NewStar Said to Extend Bid Timing Until After Bank Stress Tests

December 05, 2013

NewStar Financial Inc. (NEWS:US), the lender backed by private-equity firms Corsair Capital LLC and Capital Z Partners Management LLC, is extending its sale process into 2014, three people familiar with the matter said.

The lender, which had asked suitors to submit initial offers by Nov. 8, is waiting until U.S. banks finish government-mandated stress-test evaluations of their balance sheets before soliciting another round of bids, said one of the people, who asked not to be identified because the process isn’t public.

Capital One Financial Corp. (COF:US), one of 30 U.S. banks that have to undergo the annual Fed exam, expressed interest in buying Boston-based NewStar, one person said. Banks with at least $50 billion in assets have until Jan. 6 to submit a capital plan to regulators, who announce the results in March.

NewStar is working with Zurich-based Credit Suisse Group AG as an adviser on its potential sale, the people said.

Shares of the company fell 3.6 percent to $15.14 at 3:39 p.m., bringing the market capitalization to about $738 million.

Jack Grone, a spokesman for Credit Suisse, and Tatiana Stead at Capital One declined to comment. Robert Brown, NewStar’s head of strategy and corporate development, declined to comment through a spokesman.

NewStar, with $2.5 billion in assets, makes high-interest loans to companies owned by buyout firms. McLean, Virginia-based Capital One underwrote $451 million syndicated U.S. leveraged loans so far this year, compared with $357 million a year ago and just $3 million in 2010, data compiled by Bloomberg show.

NewStar said last month that third-quarter profit rose 5 percent to $6.4 million.

To contact the reporters on this story: Matthew Monks in New York at mmonks1@bloomberg.net; Elizabeth Dexheimer in New York at edexheimer@bloomberg.net

To contact the editor responsible for this story: Jeffrey McCracken at jmccracken3@bloomberg.net


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Companies Mentioned

  • NEWS
    (NewStar Financial Inc)
    • $11.01 USD
    • 0.10
    • 0.91%
  • COF
    (Capital One Financial Corp)
    • $81.69 USD
    • 0.77
    • 0.94%
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