NewState Capital Issued Its Third Mortgage-Backed Securities in Korea; 10.5 Billion Won MBS Underwritten by LG Investments

Business Wire, March 22, 2001

Business Editors

NEW YORK--(BUSINESS WIRE)--March 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 10.5 billion Won (US$8.07 million).

This is NewState Capital's third issuance of MBS after its initial issuance on March 20, 2000. The MBS are issued in the following three tranches: 5-year senior tranch with AAA rating, 7-year senior tranch with BBB rating and 10-year subordinate unrated Class M tranch. The quality of the underlying mortgage asset pool and expected cash flow made it possible to structure the MBS without any liquidity facility. Proceeds from the issuance will be used to fund NewState Capital's mortgage origination activities in Korea.

NewState Capital issued the MBS with LG Investment & Securities Co., Ltd. as the lead manager/underwriter and H&CB (formerly Housing & Commercial Bank) acting as the trustee. Legal counsel for NewState Capital was Shin & Kim in Korea, due diligence conducted by Samil Accounting Corporation (an international member firm of Price-WaterhouseCoopers), and ratings was provided by Korea Investors Service Inc. and Korean Management Consulting Credit Rating Corp.

NewState Capital was founded in 1994 as a specialty finance company. Presently, the company originates, sells and services home mortgage loans to middle-income individuals and families in Korea. The company maintains its headquarters with three branch offices in Seoul, Korea, and has additional branch offices in Taegu, Pusan, Ulsan and Kwang-ju, employing over 120 sales agents. The company plans to open additional offices in other principal cities in Korea in the next 6 to 12 months. Korean customers may apply for mortgages on-line via the company web site located at www.newstate.co.kr.

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