First Eagle Private Credit (NEWS) 8-K Regulation FD Disclosure

Q1

2007

Earnings

Call

May 3, 2007

Exhibit 99.1

*

*

*

*

*

*

1

This

presentation

contains

forward-looking

statements.

These

statements

include,

without

limitation,

information

with

respect

to

future

events

or

our

future

financial

performance,

results

of

operations

and

businesses

and

our

future

financial

condition.

These

forward

looking

statements

are

not

guarantees

of

our

future

performance

and

are

subject

to

risks

and

uncertainties

that

could

cause

actual

results

to

differ

materially

from

the

results

contemplated

by

the

forward-looking

statements.

Factors

that

could

affect

our

results

and

cause

them

to

materially

differ

from

those

contained

in

the

forward-looking

statements

include

those

that

we

discuss

in

“Risk

Factors

and

Forward-Looking

Statements”

in

our

annual

report

on

Form

10-K

filed

with

the SEC.

Forward Looking Statements

2

Timothy J. Conway

Chairman and Chief Executive Officer

Peter A. Schmidt-Fellner

Chief Investment Officer

John K. Bray

Chief Financial Officer

Management Participants

3

Timothy J. Conway

Chairman and Chief Executive Officer

4

Summary of Q1 2007 Results

$0.2 million Adjusted Net Income, or $0.01 Earnings Per Diluted Share

for Q1 2007

$2.4 million Net Loss, or $0.07 Per Diluted Share on a GAAP basis

Took $9.0 million after-tax impairment in residential mortgage-backed 

securities (RMBS) portfolio

$2.3 billion of managed assets, up $247 million from the Q4 2006

No loan charge-offs

Loan loss reserves maintained at 1.4%

5

Actions Taken on RMBS Holdings

Recognized $14.9 million ($9.0 million after-tax) of impairment write-

downs against our RMBS holdings through the income statement

Amount

of

charge

was

based

on

fair

market

value

indications

from

third

party

dealers

on

securities

that

we

determined

to

have

adverse

changes

in

expected

future

cash

flows

RMBS

investment

activity

is

not

integral

to

the

success

of

our

business

model

We

have

discontinued

investment

activity

in

this

market

and

will

reallocate

capital

and

resources

to

other

parts

of

the

business

Disposition

of

the

RMBS

portfolio

will

be

managed

over

time

to

maximize

recoveries

and

optimize

economic

value

Expect

RMBS

exposure

to

be

approximately

3%

of

total

loans

and

investments

by

year

end

6

Fundamentals of Core Business Franchise Remain Positive

Origination volume was $519 million

Backlog remains robust, including an active syndications pipeline

Revenue, excluding impact of recognized losses, was $26.1 million, up

29% from $20.2 million in Q4 2006

Fee revenue was strong

Continued to build platform, increasing senior bankers from 33 to 38

Balance

sheet

remains

strong

-

increased

funding

capacity

by

$200

million

and

reduced

our

cost

of

funds

Asset

management

continued

to

expand

–

growth

in

Credit

Opportunities

Fund

and

the

development

of

the

Managed

CLO

platform

7

Stable Credit Quality in Loan Portfolio

Loan Credit Quality

Commercial credit quality within expected parameters

No loan charge-offs since inception

Update on Credit Issues

Subsequent to quarter-end, an $8.4 million delinquent loan became

current as a result of restructuring efforts

Credit issue identified in recent 10-K related to $10.4 million commercial

security continues to develop

8

Peter A. Schmidt-Fellner

Chief Investment Officer

9

Original RMBS Portfolio Strategy

Residential Mortgage-Backed Securities investment had been part of

our strategy since inception

–

Large part of structured products market

–

Provided diversification for planned Structured Products term debt financing

Targeted securities that met our risk parameters and where we could

influence price and structure

Sub-prime RMBS investments generally targeted shorter duration

securities and focused on front-end cash flows

Longer duration risk generally in higher average FICO collateral

10

RMBS Portfolio Strategy

Amortized

Adjusted

# of

Par

Cost

Cost

Type of Investment

Securities

Amount

Basis

1

Basis

2

1

st

Mortgage

Securities

14

$51,267

$47,819

$45,426

Closed

End

2

nd

Mortgage

Securities

(“CES”)

9

37,902

35,058

25,166

Home Equity Line of Credit Mortgage Securities (“HELOC”)

5

16,893

16,255

13,803

Home

Equity

Loan

Net

Interest

Margin

Securities

(“NIMs”)

11

24,669

23,745

23,620

Serviced Residential Lot Loan Securities (“Lot Loans”)

3

7,111

7,055

7,055

Total

3

42

$137,842

$129,932

$115,070

$ in thousands

1

Amortized

cost

basis

as

of

March

31,

2007,

before

impairment.

2

Adjusted

cost

basis

as

of

March

31,

2007

represents

amortized

cost

basis

after

permanent

impairments.

3  

Presentation

of

RMBS

portfolio

data

excludes

NewStar’s

investments

in

ABS

CDOs

that

may

invest

in

RMBS. 

As of March 31, 2007 (unaudited; based on NewStar internal data)

11

RMBS Portfolio Composition

2005 1H

22%

2005 2H

29%

2006 1H

15%

NA

2%

2002 1H

1%

2004 2H

10%

2004 1H

4%

2003 2H

2%

2006 2H

15%

A/A-

6%

BBB+/BBB-

43%

BB+/BB-

46%

CCC

3%

NR

2%

By Rating

2

By Average Credit Score

1

Prime

27%

Mid-Prime / Alt-A

50%

Sub-Prime

23%

By Collateral Vintage

1

Average

FICO

at

time

of

issuance.

NewStar

categorizes

according

to

the

following

guidelines:

700

or

greater,

prime;

621

to

699,

Alt

A;

less

than

or

equal

to

620,

sub-prime.

2

BB+/BB/BB-

includes

two

synthetic

securities

rated

internally. 

For

split

ratings:

ratings

based

on

lower

of

two

ratings

if

two

ratings

provided

and

2

of

3

ratings

if

three

ratings

provided. 

3

Represents

one

transaction

supported

by

multiple

vintages.

As of March 31, 2007 (adjusted cost basis; unaudited; based on NewStar internal data)

3

12

RMBS Q1 2007 Mark-to-Market Summary

Amortized Cost

Adjusted

Carrying Value,

# of

Basis Before

Total

Permanent

Cost

Temporary

net of All

Category (Avg

FICO Range)

Securities

Impairment

1

Impairment

2

Impairment

Basis

Impairment

Impairment

1

st

Mortgages (604 –

672)

14

$47,819

($7,405)

($2,393)

$45,426

($5,012)

$40,414

CES (686 –

704)

9

35,058

(14,451)

(9,892)

25,166

(4,559)

20,607

HELOC (717 –

742)

5

16,255

(3,002)

(2,452)

13,803

(550)

13,253

NIMs

(600 –

700)

11

23,745

(4,066)

(125)

23,620

(3,940)

19,680

Lot Loans (717 –

742)

3

7,055

(84)

--

7,055

(84)

6,971

Total

42

$129,932

($29,007)

($14,862)

$115,070

($14,145)

$100,925

Prime (700 -

742)

3

12

$  35,821

($6,945)

($5,055)

$30,766

($1,891)

$28,875

Mid-Prime / Alt –

A (621 –

699)

4

21

67,080

(17,295)

(9,432)

57,647

(7,863)

49,784

Sub-Prime(600 -

620)

5

9

27,031

(4,767)

(374)

26,657

(4,391)

22,266

Total

42

$129,932

($29,007)

($14,862)

$115,070

($14,145)

$100,925

1

Represents amortized cost basis before impairment.

2

Three synthetic securities totaling approximately $7.7 million in book value are not marked by third-parties

and are marked by NewStar at par as of March 31, 2007.

3

Prime defined as 700 or greater.

4

Mid-Prime

defined

as

621

–

699.

5

Sub-Prime defined as less than or equal to 620.

$ in thousands

As of March 31, 2007 (unaudited; based on NewStar internal data)

13

Methodology to Determine Permanent Impairment

Applied appropriate accounting standards (EITF 99-20)

Security-by-security analysis

Developed updated estimate of cash flows since last measurement date

based on performance to date and forward looking assumptions relating

to losses, prepayments and other key factors

If present value reflected a measurable adverse change from the

previous estimate, asset was marked to third party price and permanent

impairment was taken through the Income Statement

If present value of updated cash flows did not reflect a measurable

change from the previous estimate, asset was marked to third party

price and temporary impairment was recorded on the Balance Sheet

through “Other Comprehensive Income/Loss”

14

Structured Products Strategy Going Forward

Discontinue RMBS investment strategy

Manage disposition of existing portfolio over time

–

Expect run-off of approximately $20 million by year-end

–

Accelerate via selective liquidations

–

Explore structured term-debt financing alternatives

Focus on direct origination of structured financing solutions for specialty

finance companies

15

John K. Bray

Chief Financial Officer

16

Summary of Financial Results

$ in thousands, except per share amounts

March 31,

December 31,

March 31,

($ in thousands, except per share amounts)

2007

2006

2006

Net income (loss)

(2,446)

$                 

(32,054)

$              

641

$                     

Adjusted net income

236

4,574

1,443

Net income (loss) per share:

Basic

(0.07)

$                   

(1.26)

$                   

0.05

$                    

Diluted

(0.07)

$                   

(1.26)

$                   

0.05

$                    

Weighted average shares outstanding:

(1)

Basic

36,257,589

25,376,446

11,776,539

Diluted

36,257,589

25,376,446

12,297,822

Adjusted net income per share:

Basic

0.01

$                    

0.18

$                    

0.12

$                    

Diluted

0.01

$                    

0.18

$                    

0.12

$                    

Adjusted weighted average shares outstanding:

(1)

Basic

36,257,589

25,376,446

11,776,539

Diluted

36,841,994

25,910,522

12,297,822

(1)

Weighted average shares for all periods reflect the conversions and reverse split that occurred at the IPO.

Three Months Ended

17

Increasing Revenue

Loan Portfolio

NewStar Credit Opportunities Fund

$ in millions

Growing Managed Loan Portfolio

$1,884

$383

$1,748

$762

$951

$1,171

$1,298

$571

$283

$159

$80

$33

$0

$300

$600

$900

$1,200

$1,500

$1,800

$2,100

$2,400

Q305

Q405

Q106

Q206

Q306

Q406

Q107

$22.0

$4.1

$20.2

$26.1

$4.1

$13.9

$10.3

$7.9

$6.4

$15.5

$1.3

$1.2

$1.6

$2.0

$2.0

$4.7

$15.9

$12.3

$9.5

$7.6

$5.4

$0

$3

$6

$9

$12

$15

$18

$21

$24

$27

Q305

Q405

Q106

Q206

Q306

Q406

Q107

Net Interest Income

Non-Interest Income

130% YoY

Growth

12% Sequential Qtr Growth

175% YoY

Growth

29% Sequential Qtr Growth

Solid Core Business Performance

1

Revenue excludes impact of $14.9 million unrealized loss on securities in Q1 2007 and $0.6 million in Q4 2006

1

$795

$993

$1,251

$1,456

$2,031

$2,278

Managed CLO

1

18

Origination and Revenue Composition

227 Total Clients

Asset Mgmt. Fees:

$ 1.0

$ 1.0

Interest Income

1

$ 22.0

Commitment Fees

$   0.5

Other Fees

$   0.1

$ 22.6

Syndications Fees

$ 2.0

Agent Fees

$ 0.5

$ 2.5

Q1 2007:  $1.9 billion

Q1 2007:  $383 million

Underwrite or

Arrange up to $65 million

$5MM –

$100MM

Commitment

NewStar Financial, Inc.

Syndication

NewStar Credit

Opportunities Fund

1

Includes

amortized

fees.

Q1 2007 Total Origination Volume:  $519 million

$150 million

$11 million

$278 million

As of 3/31/2007

Q1 2007: $11 million

Managed CLO

Interest Income:

$   --

Asset Mgmt. Fees:

$   --

$   --

$80 million

$ in millions

19

Increased Funding Capacity and Lowered Costs

Warehouse 1

17%

Warehouse 2

17%

Warehouse 3

8%

CLO I

16%

CLO II

21%

Equity

17%

Warehouse 4

3%

Repurchase

Agreements

1%

Credit Facilities

$1.1 billion

Term Debt

$875 million

Equity

$417 million

Total: $2.4 billion

Increased warehouse funding

capacity by $200 million in Q1 2007

Reduced warehouse funding costs

by 10 bps in Q1 2007

NewStar’s

CAM (servicer) rating

recently upgraded by Fitch

Continue to programmatically issue

CLOs

and CDOs

Plan to raise more than $1.3 billion

of debt capital in 2007

Demonstrated Access to Capital

Diversified Funding Sources

20

Loan and Investment Portfolio (NewStar Balance Sheet)

Total Loans and Other Debt Products

1

: $1.9 billion (227 Obligors)

Consumer / Retail

17%

Media

10%

Building

Materials

5%

Financial

Services

3%

Business

Services

13%

Healthcare

8%

Industrial

(Other)

11%

Commercial  Mortgage

<1%

Consumer

Mortgage

6%

Consumer 

Non-Mortgage

5%

Commercial

Non-Mortgage

6%

Multi-Family

2%

Office

7%

Retail

2%

Industrial

2%

Other

2%

Structured Products

19%

(76 Obligors)

Commercial Real Estate

14%

(35 Obligors)

Middle Market

Corporate

67%

(116 Obligors)

As of 3/31/2007

Consumer 

Mortgage-Other

<1%

1

All figures represent loans and investments, gross

21

Income Statement

(1)

Includes interest expense for the 2006 periods, call premium, termination fee and deferred finance costs associated with the Company's corporate  debt which was repaid on December 20, 2006.

(2)

Non-cash compensation charge related to restricted stock grants made since our inception as a private company, including equity awards made in connection with the initial public offering.

(3)

General and administrative expense related to the Company's initial public offering.

March 31,

December 31,

March 31,

($ in thousands, except per share amounts)

2007

2006

2006

Net interest income:

Interest income

$

45,488

$

39,243

$

18,916

Interest expense

23,537

23,766

10,966

Net interest income

21,951

15,477

7,950

Provision for credit losses

2,312

5,941

1,403

Net interest income after provision for credit losses

19,639

9,536

6,547

Non-interest income:

Fee income

2,553

3,006

810

Asset management income

964

692

67

Gain on derivatives

84

73

257

Loss on investments in debt securities

(14,862)

(846)

-

Other income

544

1,178

439

Total non-interest income

(10,717)

4,103

1,573

Operating expenses:

Compensation and benefits

10,532

47,738

5,354

Occupancy and equipment

492

486

380

General and administrative expenses

1,939

3,380

1,272

Total operating expenses

12,963

51,604

7,006

Income (loss) before income taxes

(4,041)

(37,965)

1,114

Income tax expense (benefit)

(1,595)

(5,911)

473

Net income (loss)

(2,446)

(32,054)

641

After tax adjustments:

Extinguishment of corporate debt expense

(1)

-

2,805

730

IPO related compensation and benefits expense

(2)

2,682

33,202

-

IPO related general and administrative expense

(3)

-

621

72

Adjusted net income

$

236

$

4,574

$

1,443

Three Months Ended

22

Timothy J. Conway

Chairman and Chief Executive Officer

23

2007 Guidance

Adjusted Net Income¹

$ 22-24

GAAP Net Income

$ 13-15

Total Managed Portfolio

$ 3,500

–

NewStar balance sheet

$ 3,000

–

NewStar Credit Opportunities Fund

$    500

Credit Costs

–

Net Charge-offs / Impairments

50

bps in FY 2007

$10.2

Long Term Targets

Efficiency ratio

25%

ROE (after tax)

15%

$ in millions

1

Adjusted Net Income means net income as determined under GAAP, excluding approximately $9 million of

compensation expense related to restricted stock grants made since our inception as a private company, including

equity awards made in connection with our initial public offering. 

24

Growth in Asset Management -

Managed CLO

228

300

300

406

1,200

2,200

$-

$500

$1,000

$1,500

$2,000

$2,500

$3,000

2007

2008

2009

Warehouse (NewStar B/S)

CLO

$634

$1,500

$2,500

Assets Under Management (AUM)

Completed build out of Managed

CLO platform in Q1

Expect to build assets through

2007 and issue first in a series of

CLOs

in Q4

Asset management is an important

part of NewStar’s

business model

Adds high margin revenues with

attractive returns 

$ in thousands

25

Key Themes

Solid core business performance offset by negative impact of write down

of RMBS portfolio

Acting to reduce risk and overhang on our outlook from RMBS exposure

Continuing to successfully build direct origination platform

Maintaining selectivity in a liquid loan market 

Commercial credit quality is within expected parameters

Lowered funding costs and increased capacity

Growing our asset management platform 

Changed our outlook for balance of 2007 to factor in actions taken on

securities investment activity, planned growth in asset management  

and increasing selectivity in core loan markets