NorthStar Realty Finance Renews Credit Facility for Three Years

NEW YORK, Oct. 28 /PRNewswire-FirstCall/ -- NorthStar Realty Finance Corp. (NYSE: NRF) today announced that it has completed a three year renewal and restructuring of its $374 million credit facility with Wachovia Bank, National Association ("Wachovia"), a subsidiary of Wells Fargo & Company ("Wells Fargo"). Significant components of the renewed credit facility include the following:

• The maturity date of the credit facility is extended for 3 years to October 28, 2012.
  

• The interest rate on the credit facility will be LIBOR plus 350 basis points.
  

• There are no restrictions on dividends as long as the semi-annual reductions to the credit facility described below are met.
  

• All margin call provisions have been eliminated as long as the semi-annual reductions described below are met, with the exception of potential margin requirements for defaulted assets which would be credited to the semi-annual reductions.
  

• The corporate fixed charge and recourse debt covenants in the credit facility have been eliminated.
  

• The credit facility provides for $300 million of additional borrowing capacity as the amount outstanding under the credit facility is reduced below $300 million, on a dollar-for-dollar basis.
  

• The credit facility requires $15 million of semi-annual reductions over the three year term.
  

• The Company repaid $52.5 million of the credit facility as part of the renewal and guaranteed the remaining amount outstanding. Following the repayment, the Company's unrestricted cash balance is over $100 million.
  

• The Company issued Wachovia 1 million warrants at a weighted average strike price of $8.59 per share. 500,000 warrants are exercisable immediately at a price of $7.50 per share, 250,000 warrants are exercisable after October 28, 2010 at a price of $8.60 per share and 250,000 warrants are exercisable after October 28, 2011 at a price of $10.75 per share.
  

• At least two of the following executive officers of the Company are required to remain an officer or director of the Company during the term of the credit facility: David Hamamoto (Chairman and Chief Executive Officer); Andrew Richardson (Chief Financial Officer); Daniel Gilbert (Chief Investment Officer) and Albert Tylis (Executive Vice President and General Counsel).
  

David Hamamoto, Chairman and Chief Executive Officer, commented, "We are extremely pleased with the successful, long-term renewal of our credit facility with Wells Fargo and the elimination of our only corporate debt maturity before 2012. The renewal is a significant show of support from Wells Fargo and we look forward to continuing our long-standing relationship with the bank for many years to come."

About NorthStar Realty Finance Corp.
NorthStar Realty Finance Corp. is an internally managed REIT that primarily originates and invests in commercial real estate debt, real estate securities and net lease properties. For more information about NorthStar Realty Finance Corp., please visit http://www.nrfc.com.

Safe Harbor Statement
Certain items in this press release may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations and beliefs and are subject to a number of trends and uncertainties that could cause actual results to differ materially from those described in the forward-looking statements; NorthStar Realty can give no assurance that its expectations will be attained. Factors that could cause actual results to differ materially from NorthStar Realty's expectations include, but are not limited to changes in economic conditions generally and the real estate and bond markets specifically, legislative or regulatory changes (including changes to laws governing the taxation of REITs), availability of capital, interest rates and interest rate spreads, policies and rules applicable to REITs, the continued service of key management personnel, the effect of competition in the real estate finance industry, the costs associated with compliance and corporate governance, including the Sarbanes-Oxley Act and related regulations and requirements, and other risks detailed from time to time in NorthStar Realty's SEC reports. Factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the Company's Annual Report on Form 10-K for the year ended December 31, 2008. Such forward-looking statements speak only as of the date of this press release. NorthStar Realty expressly disclaims any obligation to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in its expectations with regard thereto or change in events, conditions or circumstances on which any statement is based.