Specialty finance company NewStar Financial announced last week that it has priced and closed a $500 million CLO called the NewStar Commercial Loan Trust 2006-1 CLO. The deal is secured by a portfolio of exclusively middle market assets originated by NewStar (primarily comprising first lien loans), the firm said in a statement, noting that it is retaining the CLO's equity. The structure has a five-year reinvestment period.

Wachovia Securities and Citigroup acted as joint bookrunners on the CLO, with Wachovia as structuring agent, and Harris Nesbitt was co-manager on the transaction. According to NewStar, the bonds were heavily oversubscribed, with some classes oversubscribed as much as seven times. Blended pricing for the 2006-1 notes was Libor plus 41 basis points.

This is Boston-based NewStar's second CLO; its first vehicle, totaling $375 million, was completed in August 2005.

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