NewState Capital Issued Its Second Mortgage-Backed Securities in Korea; 18.2 Billion Won MBS Underwritten by LG Investments

Business Wire, Jan 22, 2001

Business Editors

NEW YORK--(BUSINESS WIRE)--Jan. 22, 2001

NewState Holdings, Inc. (OTCBB: NSTH) announced today that NewState Capital Co., Ltd., its Korean operating subsidiary ("NewState Capital"), issued mortgage-backed securities (MBS) in the principal amount of 18.2 billion Won ($16.5 million). This is the second MBS issuance by NewState Capital. The MBS are issued in five tranches. The two senior tranches are rated triple-A by Korean Rating Services and Korean Management Consulting Credit Rating Corp. and the three subordinate tranches are rated single-A, triple-B and double-C. Legal counsel for the issuer was Shin & Kim in Korea, due diligence was conducted by Price Waterhouse Coopers, and the trustee was Housing & Commercial Bank of Korea. Terms of each tranche are as follows:

     Amount
(Won Billion)       Coupon       Maturity      Ratings
-------------       ------       --------      -------
       W5.0           8.5%      3.0 years      AAA
       W8.5           9.2%      7.0 years      AAA
       W1.8          10.0%      8.0 years      A
       W1.2          11.0%      9.0 years      BBB-
       W4.6          15.0%     10.0 years      CC

Proceeds from the issuance will be used to fund NewState Capital's mortgage origination activities in Korea. The MBS will be underwritten by LG Investment & Securities Co., Ltd. ("LG"). LG is one of the largest securities firms in Korea with over 7.3 trillion Korean Won in total assets and over 2,500 employees working in 99 domestic branches and 5 overseas branches.

NewState Capital was founded in 1994 as a specialty finance company. Presently, NewState Capital originates, sells and services home mortgage loans to middle-income individuals and families in Korea. NewState Capital maintains its headquarters in Seoul, Korea and has offices in Taegu, Suh-Taegu, Changwon, Jinju, Pusan, and Kwang-ju, employing over 130 people and agents. The company plans to open up additional offices in other principal cities in Korea in the next six to twelve months. Customers may apply for mortgages on-line via NewState Capital's web site located at www.newstate.co.kr.

Certain statements made in this release by NewState Holdings, Inc. are forward-looking in nature. Such statements may be identified by forward looking terminology such as "may," "believe," "anticipate," "expect" and similar language. Actual results may differ materially from those projected in forward-looking statements. NewState Holdings, Inc. believes the factors which may cause the actual results to differ and which reflect the primary risk factors associated with its business include: the need for obtaining substantial financing sources, assuring liquidity and maintaining substantial equity; timely development of internal programs and procedures to enable the securitization of mortgages; the acceptance of mortgage-backed securities in Korea; the successful integration of acquisitions; the ability to attract and retain high quality employees; change in overall economy of Korea and Asia; the number and size of competitors in its markets; change in technology; and changes in law and regulatory policies. NewState Holdings, Inc. does not undertake to update any forward-looking statement. NewState Holdings, Inc. believes that all information in this release has been obtained from sources considered reliable, but cannot guarantee that the statements presented herein area accurate or complete.