NEWSTAR FINANCIAL OPENS SOUTHERN CALIFORNIA OFFICE

Hires Veteran Banker Jeremy Back to Expand National Presence

Boston, Massachusetts, December 7, 2006 - NewStar Financial, Inc., a Boston-based commercial finance company announces it will open an office in San Diego, California. With the addition of San Diego, NewStar will have an operating presence in six cities in key markets. The Company already has offices in Boston, Massachusetts, San Francisco, California, Chicago, Illinois, Charleston, South Carolina and Darien, Connecticut.

NewStar Financial, Inc., a specialty finance company provides customized financing solutions to mid-sized customers in the corporate middle market, commercial real estate, and structured products markets. Since its launch in July of 2004, the Company has completed more than 162 transactions across the country totaling more than $1.8 billion through September 30th, 2006.

"In May of 2006, we opened the San Francisco office with Jeff French and his team. As our company continues to grow and thrive, expanding our presence into Southern California makes perfect business sense," said Tim Conway, chief executive officer of NewStar. "We are certain there is a demand for NewStar's expertise, flexibility and resources throughout the region and we are every bit as confident in our ability to meet that demand."

Jeremy Back, Managing Director, has been hired to focus on the Southern California market and will work closely with Jeff French to further develop the west coast markets. He will report to NewStar's middle market origination group co-heads Tim Shoyer and David Dobies. "We are very excited to have such a seasoned professional representing our firm in this important market," commented Tim Shoyer. Prior to joining NewStar, Mr. Back was with Golden Tree Asset Management, originating and structuring senior and subordinated debt transactions. Earlier in his career, he was with Relational Advisors, DLJ/Credit Suisse, CIBC World Markets and Merrill Lynch in various roles related to leveraged finance. Mr. Back graduated from the Wharton School of the University of Pennsylvania with a B.S.E. degree. He can be reached at jback@newstarfin.com or at (310) 922-6895.