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Top Stories: Business and Finance

The following are the days top
business stories:

1. Goldman Adopts Long-Term Incentive Plan to Deter `Imprudent Risk-Taking
2. Japanese Stocks Drop for Second Day as Metal Prices Fall, Yen Strengthens
3. Indias ICVL Hires Citigroup to Study Countering Rios Bid for Riversdale
4. Dim Sum Bond Leading Underwriters See Sales Doubling on Yuan: China Credit
5. New Zealand Economy to Get Lift From Quake Rebuilding, Rugby Fans in 2011
6. Irish Government Takes Control of Allied Irish, Fourth Bank in Two Years
7. Boeing to Resume 787 Dreamliner Test Flights Today After Electrical Fire
8. Apollo Said to Pay $1.2 Billion for Credit Suisse Distressed Property Debt
9. Toyota Disappointed $10 Million Crash Settlement With Family Made Public
10.Deposit `War Fails to Ease Record Cash Crunch at SBI, HDFC: India Credit
11.Nippon Yusen to Triple India Capesize Fleet on Demand for Coal, Iron Ore
12.Shooting Gold Diggers at Barrick African Mine Coincides With Record Prices

1. Goldman Adopts Long-Term Incentive Plan to Deter `Imprudent Risk-Taking

Goldman Sachs Group Inc., weighing 2010 pay packages for a
year that could rank as Wall Street´s second best, said it may
grant bonuses that depend on future earnings, in addition to
stock performance. The awards would go to key employees and
be tied to a variety of financial measures including revenue,
net income and return on equity, a gauge of profitability, the
New York-based company said yesterday in a regulatory filing.
Awards may consist of cash, securities or other equity-linked
components, and carry provisions allowing their cancellation or
return. The plan is a tool the compensation committee may use
to further align incentive compensation with long-term
performance, said Stephen Cohen, a company spokesman. Cohen
declined to provide figures on potential payouts, saying that
awards haven´t been set. Regulators have pushed banks to design
pay packages for top employees that would discourage excessive
risk-taking, after a financial crisis wiped out firms including
Lehman Brothers Holdings Inc. and led to government bailouts.
Most firms have interpreted the guidance to emphasize deferred
stock awards over cash bonuses.

2. Japanese Stocks Drop for Second Day as Metal Prices Fall, Yen Strengthens

Japanese stocks fell for a second day as metal prices
declined and the dollar weakened against the yen, damping the
outlook for export earnings. Nissan Motor Co., a carmaker that
earns about 75 percent of its revenue overseas, lost 1 percent.
Canon Inc., a camera maker that gets about 80 percent of its
sales abroad, sank 0.9 percent. Mitsubishi Materials Corp.,
Japan´s third-largest copper producer, slid 0.8 percent. The
stronger yen will likely lead investors to sell shares to lock
in profits, said Juichi Wako, a senior strategist at
Tokyo-based Nomura Holdings Inc. The Nikkei 225 Stock Average
fell 0.6 percent to 10,284.08 as of 9:05 am in Tokyo. The
broader Topix lost 0.3 percent to 902.73, with more than twice
as many shares declining as advancing. Both gauges are headed
for the biggest drop and the lowest close since Dec. 20.

3. Indias ICVL Hires Citigroup to Study Countering Rios Bid for Riversdale

International Coal Ventures Ltd., a state-run joint
venture, is studying an offer for Riversdale Mining Ltd. to
counter a A$3.9 billion ($3.9 billion) bid from Rio Tinto
Group. ICVL appointed Citigroup Inc. to examine a possible
takeover offer for the Sydney-based coal company with mines in
Mozambique, the venture´s chairman CS Verma said yesterday.
London-based Rio yesterday bid A$16 a share for Riversdale,
securing 14.9 percent of the company in pre-bid agreements.
Indian companies are seeking coal mines overseas to ensure raw
material supplies for producing steel and electricity. Brazil´s
Vale SA or Eurasian Natural Resources Corp. may make bids,
according to Sanford C. Bernstein amp; Co., as Tata Steel Ltd.,
Riversdale´s biggest holder, said it will study Rio´s offer in
the context of other alternatives available to Tata. The A$16
cash offer is unlikely to secure acceptance from all of
Riversdale´s shareholders, analysts led by Hayden Bairstow at
CLSA Asia-Pacific Markets, said yesterday in a report, raising
his price target for Riversdale by 3 percent to A$18.
Riversdale´s Benga and Zambeze coal projects are world class
and we believe other suitors may show an interest in Riversdale
now a formal bid has been tabled, he said.

4. Dim Sum Bond Leading Underwriters See Sales Doubling on Yuan: China Credit

HSBC Holdings Plc and Standard Chartered Plc, the biggest
foreign underwriters of yuan bonds sold in Hong Kong, say sales
will double in 2011 as demand outstrips supply and the yuan
appreciates. New issues may increase to a record 80 billion
yuan ($12 billion) next year, with as much as 30 billion yuan
of sales in the first quarter, according to HSBC, the No. 2
underwriter of so-called dim sum bonds. Standard Chartered, the
fourth largest, says sales could top as much as 100 billion
yuan as Moscow-based United Co. Rusal and BP Plc plan issues.
Offerings this year total 40.7 billion yuan, data compiled by
Bloomberg show. We´re likely to see strong growth to around 80
billion yuan in 2011, Sean Henderson, HSBC´s head of Asia debt
syndicate, said in a telephone interview. The dim sum market
has grown 10-fold since 2008 as China seeks to use the city as
an international center to promote the use of the yuan beyond
its borders for trade and finance. Forecasts of currency gains
spurred a 45 percent month-on- month jump in yuan deposits in
Hong Kong to a high of 217.1 billion yuan in October, according
to the latest data from the Hong Kong Monetary Authority,
creating an investor base seeking yuan-denominated securities.
Bond issuers can save about 197 basis points, or 1.97
percentage point, in interest payments selling yuan bonds in
Hong Kong rather than in Shanghai.

5. New Zealand Economy to Get Lift From Quake Rebuilding, Rugby Fans in 2011

New Zealand´s economy will likely rebound from the verge of
a recession and expand next year, buoyed by earthquake
reconstruction and a tourism boost from the Rugby World Cup.
Gross domestic product fell 0.2 percent in the third quarter,
as the Sept. 4 temblor damaged houses, businesses and roads,
Statistics New Zealand said in Wellington yesterday. Finance
Minister Bill English said the recovery won´t be derailed,
citing falling unemployment and rising prices for commodity
exports. Rebuilding work after the magnitude 7 earthquake
rocked Christchurch city is underpinning demand and helping
prevent a recession, economists said. Another catalyst may be
the rugby tournament´s 85,000 visitors next year to the country
of 4.4 million and an estimated NZ$500 million ($372 million)
in tourism spending in the second half of 2011. The Rugby
World Cup is going to have a significant positive impact on
growth in the third quarter and thereafter, said Helen Kevans,
economist at JPMorgan Chase amp; Co in Sydney. Positives on the
radar include reconstruction, strong economic growth for New
Zealand´s trading partners and elevated commodity prices, she
said.

6. Irish Government Takes Control of Allied Irish, Fourth Bank in Two Years

Ireland´s High Court said Allied Irish Banks Plc can be
taken over by the government without shareholder approval as
the lender became the fourth bank to fall under state control
since 2008. Finance Minister Brian Lenihan secured approval
from the Dublin-based court today to inject 3.7 billion euros
($4.8 billion) into the lender by Dec. 31 and raise its stake
to 92 percent from 19 percent, the Finance Ministry said in a
statement. Allied Irish, Ireland´s largest company by market
value in 2007, recorded its biggest share price drop in 22
months in Dublin trading. Valued at almost 21 billion euros at
its peak, the bank´s market capitalization today was 347
million euros. We wouldn´t have had Allied Irish Banks on the
1st of January if this investment wasn´t made, Lenihan said in
an interview with Dublin-based broadcaster RTE Radio after the
ruling. Irish banks are grappling with loan losses after the
collapse of a decade-long real-estate boom. The state has
already taken control of Anglo Irish Bank Corp., Irish
Nationwide Building Society and EBS Building Society. Irish
Life amp; Permanent Plc, the only Irish lender to avoid a bailout,
will try to meet new capital requirements from its own and from
market resources early next year, Lenihan said. So will Bank of
Ireland Plc, which is 36 percent state-owned, he said.

7. Boeing to Resume 787 Dreamliner Test Flights Today After Electrical Fire

Boeing Co. said one of its 787 Dreamliner test jets will be
allowed to resume limited flights today after an electrical
fire grounded the fleet and added to delays for a plane already
running three years behind schedule. The 787s will fly for the
company´s purposes only, with efforts toward certification by
the US Federal Aviation Administration to be restarted later,
Chicago-based Boeing said today in a statement. Flights by the
six test aircraft were suspended after an electrical fire broke
out Nov. 9 in a 787´s power panel and knocked out some
controls, forcing an emergency landing in Laredo, Texas. The
Dreamliner´s scheduled entry into commercial service has been
postponed six times and was targeted for the first quarter of
2011 before the blaze. As we return to flight test and
determine the pace of that activity, we remain focused on
developing a new program schedule, Scott Fancher, the 787
program chief, said in the statement. We expect to complete
our assessment of the program schedule in January.

8. Apollo Said to Pay $1.2 Billion for Credit Suisse Distressed Property Debt

Apollo Global Management LLC, a New York-based
private-equity firm, agreed to pay $1.2 billion for distressed
property loans held by Credit Suisse Group AG, according to a
person with knowledge of the deal. The mortgages are backed by
buildings in Europe, said the person, who asked not to be named
because the agreement hasn´t been made public. Demand for
commercial property loans has increased as banks around the
world strengthen balance sheets and begin to sell non-core
property assets. Private-equity firms including TPG Capital and
KKR amp; Co. have vied for ING Groep NV´s real estate investment
unit, according to people familiar with the matter. Morgan
Stanley said last month that European real estate stocks will
probably outperform the broader market into 2011. Apollo last
month completed the purchase of the real estate investment unit
of Citigroup Inc., adding more than $3 billion to its assets
under management.

9. Toyota Disappointed $10 Million Crash Settlement With Family Made Public

Toyota Motor Corp., saying it reached an out-of-court
settlement with the family of a California Highway Patrol
officer who together with three others died when their car sped
out of control and crashed, said it was disappointed that the
amount of the settlement was made public. Toyota, based in
Toyota City, Japan, agreed to settle with the family for $10
million, said Larry Willis, an attorney for Bob Baker Lexus,
the San Diego car dealership that loaned the Lexus ES350 to
Mark Saylor and isn´t part of the settlement. A court order
barring the parties involved from discussing the settlement
terms, which must be approved by a state court judge in Los
Angeles, expired yesterday. These parties agreed to keep the
amount confidential, in part to protect the families from
unwanted solicitations and to allow them to move on from this
difficult period, the Toyota City, Japan-based automaker said
today in an e-mailed statement. Mr. Baker now wants the amount
publicized in an apparent effort to shift the focus away from
his dealership as he continues to litigate this case with the
families.

10.Deposit `War Fails to Ease Record Cash Crunch at SBI, HDFC: India Credit

India´s biggest banks are battling for deposits as they
fall behind demand for loans amid the nation´s worst cash
crunch on record. State Bank of India raised one-year rates by
175 basis points, or 1.75 percentage point, since July 30 to a
20-month high of 7.75 percent, while Housing Development
Finance Corp. added 75 to 7.95 percent. The average deposit
growth of 15.3 percent during the period lagged behind a 21.1
percent increase in lending, according to data from the
monetary authority. One-month interbank lending rates in Asia´s
third-biggest economy increased 142 basis points to 8.37
percent this quarter and 167 basis points in China to 5.18
percent. The rates banks offer are still too low, robbing the
economy of a source of funds to fuel growth, Reserve Bank of
India Governor Duvvuri Subbarao, who has overseen six increases
in benchmark borrowing costs this year, told a bankers´
conference on Dec. 3. The process of raising deposit rates has
begun, but it hasn´t progressed far enough to ease the cash
shortage, said Krishnamurthy Harihar, the Mumbai-based
treasurer at FirstRand Ltd., a unit of South Africa´s
second-largest bank. Deposit rates will have to rise much more
to help banks garner sufficient liquidity.

11.Nippon Yusen to Triple India Capesize Fleet on Demand for Coal, Iron Ore

Nippon Yusen KK, Japan´s second- largest operator of
dry-bulk ships, plans to more than triple its fleet of
capesizes serving India because of demand for coal and iron ore
in the world´s fastest-growing major steel market. The shipping
line expects to have 15 capesizes hauling the commodities to
India by 2015, close to the fleet size currently serving China,
Kazuo Ogasawara, general manager of its bulker group, said in
an interview in Tokyo. The company plans to expand its total
capesize fleet to 120 from 95 by 2012-2013. Indian imports of
coal may surge nearly seven-fold to 200 million metric tons a
year by 2015 as the growing economy drives demand for metal and
electricity, Ogasawara said. The nation´s steel consumption may
also jump 14 percent next year, compared with a 3.5 percent
increase in China and a decline in Japan, according the World
Steel Association. Crude steel output in India is set to
surpass the level of Japan, Ogasawara said in a Dec. 21
interview. In addition, electricity demand is coming in.

12.Shooting Gold Diggers at Barrick African Mine Coincides With Record Prices

Barrick Gold Corp.´s North Mara mine near the Tanzanian
border with Kenya disgorges millions of pounds of waste rock
each week, piled high around communities where almost half the
people live on less than 33 cents a day. Children in school
uniforms scurry across the rubble to reach their classes. Women
with water pails atop their heads skirt past the heaps. The
piles grow as the longest bull market for gold in at least 90
years pushes Barrick, the world´s largest miner of the precious
metal, to increase production. Villagers, too, are hunting the
ore on the North Mara land that their ancestors worked for
decades, sometimes paying with their lives. Security guards and
federal police allegedly have shot and killed people scavenging
the gold-laced rocks to sell for small amounts of cash,
according to interviews with 28 people, including victims´
relatives, witnesses, local officials and human-rights workers.

-0- Dec/24/2010 00:35 GMT

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Tags: Finance

Japan Finance Minister: Will Take Decisive Forex Steps If Needed

TOKYO (Dow Jones)–Japan’s finance minister said Friday there is no change to the government’s policy of taking “decisive steps” to moderate a strong yen if needed.

“There’s no change to …

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Tags: Finance

“Yahoo! Finance” for iOS Now Available on the AppStore

Yahoo! Finance, developed by 2009 Yahoo! Inc., is now available from the App Store and has made Apples Top 300 iPad/iPod applications list. The app was last released on September 08, 2009 and sells for Free.

The application developers description of the application is, The Yahoo! Finance App for the iPhone and iPod Touch brings you total coverage from your favorite financial source.

You’ve come to expect the highest quality financial coverage from Yahoo! Finance. Now you can get it all in an app built for you. Ranging from broad market indices to the details on a specific commodity, it’s all here. This app has something for everyone, no matter what your need of financial detail may be.

Features of the Yahoo! Finance app include:
o My Quotes: Organize the stocks you care about at a glance
o Market Summary: Customized Yahoo! daily news and market conditions
o Tech Ticker Video: Get weekday financial news and analysis from Yahoo! Finance
o Real Time After Hours Data: Track your stocks when the markets are closed and open
o Detailed Statistics: Beyond highs and lows, find news, industry and competitors
o Graph Compare: Gorgeous graphs which let you match up anything from currencies to markets
o Research Track: Go beyond stocks track industries, commodities and more
o Import Yahoo! Portfolio: Pull in the companies you track into your quote page instantly
o Compare Currencies: Interested in the Mongolian Tugrik exchange rate? Search by country, done!
o Smart Pagination: Scan news articles, see related graphs, quotes and more
o Shake Navigation: Shake your phone to take you back to the main menu screen

If youre not familiar with the Apple App Store, its the premier way to download applications for your iPod Touch, iPhone, iPad and iPod devices. Apple curates the best applications for your mobile device and lists them conveniently on iTunes. The App Store is the worlds largest collection of mobile applications, provides an easy way to keep your apps up-to-date and makes installing applications simple. There are more than 300,000 iPhone and iPod Touch applications available on the App Store alone and thousands more for the iPad.

Click Here to get Yahoo! Finance from the App Store or another title.

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Tags: Finance

Bethel finance board sets new tone

William Slifkin is a member of the Bethel Board of Finance.
Photo: File Photo
/ The News-Times File Photo

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Tags: Finance

Furniture Choice Launches New Finance Options for 2011

Furniture Choice offers customers new finance options for the New Year including Buy Now Pay Later and a range of monthly instalment payment plans.

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Tags: Finance

Short of talent, Islamic finance taps women scholars

KUALA LUMPUR (Reuters) – When Malaysian Aida Othman signed up for the new law programme at the Islamic university, she did not expect to become one the few women with their hands on the levers of the worlds $1 trillion (620 billion pounds) Islamic finance sector.

Rising global demand for scholars who can advise firms on compliance with Islamic legal principles called sharia is behind the quiet and almost accidental way in which women are growing into a small but powerful force in a male-dominated business.

There are not many women involved my job, Aida, who manages the sharia advisory practice at Malaysias biggest law firm, told Reuters.

Im glad to be able to show to young graduates and young scholars in my field if youre interested enough there is a way into sharia advisory, the 41-year-old, who went on to study at Cambridge and Harvard, said.

Islamic finance has embraced women relatively rapidly in its 30-year modern history, as burgeoning demand for expert lawyers and growing female education rewrite the rules of the business.

As Islamic finance expands 15-20 percent a year and enters new markets from Australia to South Africa, so the need has grown for more sharia advisers who can structure financial transactions according to Islamic rules that crucially include a ban on interest.

Sharia advisers are typically Islamic law scholars who are able to marry sharia with international banking and legal practices to help banks devise sharia-compliant products ranging from mortgages to hedge funds.

There are 221 Islamic finance scholars globally but only a handful are in high demand, with the top six occupying almost a third of the 1,054 board positions open to Islamic experts, a Funds@Work report issued this year shows.

This small circle of men dominate the boards of Islamic banks but there are now about 10 women sharia advisers in Malaysia, home to the worlds largest market for sukuk, or Islamic bonds.

The number of women sharia scholars in Malaysia has more than tripled in the last five years according to some estimates.

There are no official figures, but practitioners say there are no women sharia advisers in the Middle East.

MIDEAST LAGS MALAYSIA

While the culture has opened the way to the rise of female advisers in Malaysia, more conservative social mores have kept women sidelined from the Islamic finance industry in the Gulf Arab region, experts say.

The need for sharia advisers will increase, said Mohamad Safri Shahul Hamid, deputy chief executive at Malaysias MIDF Amanah Investment Bank, a sukuk arranger.

Will we see more women? In Malaysia, we will because they will want to follow the footsteps of noted women scholars. Im not so sure about the Middle East. I still think they have to address the cultural issue. But they are moving in the right direction as, at least commercially, there are a lot more avenues for women to join the workforce.

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Tags: Finance

German Finance Min: Restructuring Of Landesbanken Still Needed

BERLIN (Dow Jones)–German Finance Minister Wolfgang Schaeuble Thursday stressed that state-controlled wholesale banks must …

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Tags: Finance

NorthStar Realty Finance Announces Third Quarter 2010 Results

NEW YORK, Nov. 4, 2010 /PRNewswire via COMTEX/ –
Third Quarter Highlights

Third quarter 2010 AFFO per share of $0.15.

NorthStar had $265 million available liquidity at September 30, 2010 including $135 million of unrestricted cash.

Third quarter 2010 cash dividend of $0.10 per common share.

$1.1 billion commercial real estate loan CDO acquired from CapitalSource Inc. for $7 million.

NorthStar Realty Finance Corp.
/quotes/comstock/13*!nrf/quotes/nls/nrf
(NRF
4.25,
-0.07,
-1.60%)
today announced its results for the quarter ended September 30, 2010.

Third Quarter 2010 Results

NorthStar reported adjusted funds from operations (“AFFO”) for the third quarter 2010 of $0.15 per share compared with $0.25 per share for the third quarter 2009. AFFO for the third quarter 2010 was $12.3 million compared with $19.5 million for the third quarter 2009. Net loss to common stockholders for the third quarter 2010 was $(144.1) million, or $(1.87) per share, compared to a net loss of $(66.5) million, or $(0.95) per share for the third quarter 2009. Realized gains totaled $26.8 million for the third quarter 2010, compared with $29.2 million for the third quarter 2009. Third quarter 2010 net loss includes $(169.4) million of unrealized losses relating to non-cash mark-to-market adjustments principally caused by tighter credit spreads, increasing the value of NorthStar’s liabilities, compared to $(85.0) million of unrealized losses relating to non-cash mark-to-market adjustments for the third quarter 2009. The non-cash mark-to-market gains and losses are excluded from AFFO.

At September 30, 2010, diluted GAAP book value per common share was $15.78. For a reconciliation of net income to AFFO and calculations of return on average common book equity and diluted book value per common share, please refer to the tables on the following pages.

David T. Hamamoto, chairman and chief executive officer, commented, “During the 2010 third quarter we saw continued improvement in liquidity within the commercial real estate markets. The broad search for yield by institutional and individual investors is increasingly driving down risk premiums for commercial real estate, and traditional real estate investors are becoming more aggressive in bidding for assets. The CMBS markets are gradually healing, but volumes remain low by historical measures and there is an enormous need for debt capital that cannot be met by current providers. Economic conditions and commercial property performance also continue to be challenging, but it appears that general economic fundamentals have somewhat stabilized.”

Mr. Hamamoto continued, “NorthStar remains well-positioned to capitalize on emerging investment opportunities in commercial real estate finance. We are raising equity capital through our non-traded REIT efforts, for which NorthStar is the manager, and our strong liquidity position should allow us to pursue very interesting investment opportunities, such as the July 2010 CapitalSource CDO acquisition. We are looking forward to the increasing opportunities we expect to see from the market as banks, loan servicers and other historical market participants become more aggressive in working out their real estate portfolios.”

Investment Summary

During the third quarter 2010 NorthStar used approximately $18 million of unrestricted cash in four separate investment transactions. NorthStar, as previously announced acquired from CapitalSource Inc. for approximately $7 million the collateral management and special servicing rights and the original below-investment grade notes of a $1.1 billion commercial real estate loan collateralized debt obligation (“CSE CDO”). After completing the acquisition NorthStar also purchased for $2 million approximately $28 million face of notes originally rated investment grade and issued by the CSE CDO. NorthStar also acquired from its managed securities fund for approximately $3 million the equity notes and management fees relating to an $800 million commercial real estate securities CDO (N-Star IX) originally issued by NorthStar and in which NorthStar previously held a minority interest. NorthStar also invested $6 million in an equal partnership with a third party to acquire a defaulted $34 million first mortgage loan participation in which NorthStar also held a $70 million REO position prior to the purchase.

During the third quarter 2010, NorthStar funded $21 million related to prior loan commitments, including $16 million of loans funded by the CSE CDO relating to loans financed by the CDO. NorthStar received $43 million of loan repayment and asset sale proceeds including $18 million related to partial loan payoffs and $25 million related to the sale of a mezzanine loan backed by a hotel portfolio having a $32 million aggregate unpaid principal balance. In addition, NorthStar received $161 million of loan repayments in the CSE CDO, including $156 million related to three full payoffs and $5 million related to partial payoffs. During the third quarter 2010, NorthStar also acquired $66 million of securities having a par amount of $138 million and having an average BBB+/Baa1 credit rating and received $62 million of proceeds from sales of securities. No net lease properties were acquired during the third quarter 2010.

On the July 8, 2010 acquisition date the CSE CDO loan collateral was comprised of approximately $1.1 billion of loans backed by commercial real estate, of which 99% are first mortgages. Non-performing loans (“NPLs”) represented approximately $243 million of the collateral balance at closing. The CDO’s reinvestment period expires in January 2012. On the acquisition date, the fair market value of assets acquired exceeded the fair market value of liabilities assumed by approximately $15 million, which was recorded as an acquisition gain during the 2010 third quarter and excluded from AFFO. The fair market value of the management rights was approximately $7 million on the acquisition date. The performing loan and NPL assets were acquired at aggregate 53% and 93% discounts, respectively, to outstanding principal balances, resulting in an approximately 14% weighted-average effective yield to estimated recovery amounts at maturity. The $1 billion of issued CSE CDO note liabilities had a 1.7% weighted-average interest rate (based on 0.53% three-month LIBOR) and were recorded at their estimated fair market value of $440 million. NorthStar elected the fair value option of accounting for these notes, consistent with the accounting treatment for its real estate debt CDOs.

On the acquisition date the CSE CDO had an approximately $152 million deficit in its overcollateralization (“OC”) test. At September 30, 2010, the OC deficit was approximately $124 million and as of the October 2010 monthly statement date, the OC deficit was further reduced to $27 million. During the third quarter 2010, NorthStar received $1.3 million of fees from the CSE CDO. For further information relating to the CSE CDO, please refer to the supplemental information contained in the following pages.

The consolidation of N-Star CDO IX resulted in an approximately $161 million increase to NorthStar’s book value. The increase is attributable to the fair value of net assets at acquisition over the purchase price. NorthStar elected the fair value option of accounting for the available for sale securities and liabilities, consistent with the accounting treatment for its real estate securities CDOs.

NorthStar had approximately $7.3 billion of assets under management at September 30, 2010 based on par of loans and securities and purchase prices of owned real estate assets.

Liquidity, Financing, and Capital Markets

The weighted-average cost of NorthStar’s debt was 2.07% at September 30, 2010.

Total available liquidity at September 30, 2010 was approximately $265 million, including $135 million of unrestricted cash and cash equivalents, and $130 million of uninvested and available cash in NorthStar’s CDO financings, including $97 million in the CSE CDO. At September 30, 2010 NorthStar’s only unrestricted cash needs relating to non-discretionary future funding obligations associated with existing loan commitments totaled approximately $4 million.

During the third quarter 2010, NorthStar Income Opportunity REIT I, Inc. (NIOR), which is advised by NorthStar and for which NRF Capital Markets, a wholly-owned subsidiary of NorthStar, is the broker-dealer, raised approximately $19 million of equity capital. Since its inception, NIOR has raised approximately $35 million from accredited investors. On September 8, 2010, NIOR agreed to merge with NorthStar Real Estate Income Trust, Inc. (NSREIT), a registered non-traded REIT also advised and sponsored by NorthStar seeking to raise $1.1 billion and whose registration statement was declared effective during the third quarter 2010. The merger was completed on October 18, 2010.

Risk Management

At September 30, 2010, exclusive of the CSE CDO, NorthStar had five loans on NPL status having a $78 million aggregate outstanding principal balance, representing 4.4% of total loan assets, compared to two loans representing $50 million as of June 30, 2010. During the third quarter 2010, the lender group took effective ownership of retail collateral located in East Rutherford, NJ, in which NorthStar had a $93 million first mortgage participation and had $23 million reserved for in prior periods. NorthStar’s $70 million net investment in the REO is now classified as an equity investment in a non-consolidated joint venture. This loan was not an NPL at June 30, 2010 but had an August 2010 maturity default at which time the first mortgage lending group, which includes NorthStar, took effective ownership of the collateral. In addition, on September 30, 2010, the CSE CDO had nine loans on NPL status having a $240 million aggregate outstanding principal balance and a $15 million book value. NorthStar designates a loan as non-performing at such time as the loan becomes 90 days delinquent on contractual debt service payments or the loan has a maturity default.

During the third quarter 2010, NorthStar recorded $43.4 million of credit loss provisions relating to seven loans and recorded a $0.5 million credit for a loan sold in October 2010 for more than its $11 million net book value. The third quarter 2010 credit loss provision includes $6.5 million relating to the $32 million mezzanine loan sold during the quarter which had not been reserved for in prior periods. As of September 30, 2010, loan loss reserves totaled $174.7 million, or 9.9% of total NorthStar loans (exclusive of CSE CDO loans), related to 15 loans having an aggregate $408 million gross book value (exclusive of the related reserve).

NorthStar’s securities portfolio had two upgrade actions for $1 million and 62 downgrades representing $360 million of securities during the third quarter 2010. NorthStar reports all current rating actions issued by each agency independently of actions issued during prior quarters. As of September 30, 2010 the average credit rating of NorthStar’s real estate securities was B+/B1. During the third quarter 2010, S&P and Fitch downgraded several classes of notes issued by two of NorthStar’s CDO financings, N-Star IX and N-Star III, respectively. Rating agency actions associated with NorthStar’s issued CDO financings have no impact on the payment terms of such debt. At September 30, 2010, N-Star CDOs I and II are failing their OC tests.

As of September 30, 2010, NorthStar’s net lease portfolio was 89% leased and net lease assets have a 6.9-year weighted average remaining lease term. For more information regarding the core net lease assets (exclusive of healthcare net leased real estate), please refer to the tables on the following pages.

Andrew C. Richardson, chief financial officer and treasurer, commented, “NorthStar’s strong balance sheet, with no corporate debt maturities until June 2012, and solid liquidity position are positioning the Company to pursue creative investments like the CSE CDO acquisition, and enabling NorthStar to expand its asset management activities, such as in the non-traded REIT market. Although portfolio credit challenges continue and economic conditions remain weak, increasing liquidity for commercial real estate should bolster the sector.”

Stockholder’s Equity and Dividends

At September 30, 2010, NorthStar had 82,377,124 total common shares and operating partnership units outstanding, and $77 million of non-controlling interest relating to its operating partnership. Book value per diluted common share was $15.78 at September 30, 2010. Exclusive of all unrealized mark-to-market adjustments, credit loss reserves, and accumulated depreciation and amortization, book value at September 30, 2010 would be $7.58 per diluted common share. For a calculation of book value per diluted common share, please refer to the table on the following pages.

On October 19, 2010, NorthStar announced that its Board of Directors declared a dividend of $0.10 per share of common stock, payable with respect to the quarter ended September 30, 2010. The dividend will be paid on November 15, 2010 to shareholders of record as of the close of business on November 5, 2010.

Earnings Conference Call

NorthStar will hold a conference call to discuss third quarter 2010 financial results on Thursday, November 4, 2010, at 10:00 AM Eastern time. Hosting the call will be David Hamamoto, chairman, president and chief executive officer, and Andrew Richardson, chief financial officer and treasurer. The Company will post on its website, www.nrfc.com, a September 30, 2010 update to its corporate presentation.

The call will be webcast live over the Internet from NorthStar’s website, www.nrfc.com, and will be archived on the Company’s website. The call can also be accessed live over the phone by dialing 877-941-2930 or for international callers, by dialing 480-629-9726.

A replay of the call will be available one hour after the call through Thursday, November 11, 2010 by dialing 800-406-7325 or 303-590-3030 for international callers, using pass code 4371258.

About NorthStar Realty Finance Corp.

NorthStar Realty Finance Corp. is a finance 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 www.nrfc.com.

NorthStar Realty Finance Corp. `
Consolidated Statements of Operations
($ in thousands, except per share amounts)

Three Months Ended
September 30,
-------------
2010 2009
---- ----
(unaudited) (unaudited)
Revenues and other income:
Interest income $88,791 $34,305
Interest income - related
parties 112 4,179
Rental and escalation income 34,252 25,753
Advisory and management fee
income - related parties 684 1,924
Commission income 1,861 -
Other revenue 1,093 206
----- ---
Total revenues 126,793 66,367
Expenses:
Interest expense 32,233 28,360
Real estate properties -
operating expenses 12,421 4,212
Asset management fees - related
parties - 841
Commission expense 1,399 -
Impairment on operating real
estate - -
Provision for loan losses 42,877 24,229
General and administrative:
Salaries and equity-based
compensation (1) 11,863 10,960
Auditing and professional fees 3,831 1,914
Other general and administrative 4,277 2,748
----- -----
Total general and administrative 19,971 15,622
Depreciation and amortization 8,621 3,148
----- -----
Total expenses 117,522 76,412
Income/(loss) from operations 9,271 (10,045)
Equity in earnings/(loss) of
unconsolidated ventures (60) 2,737
Unrealized (loss)/gain on
investments and other (198,168) (88,336)
Realized gain on investments and
other 26,795 29,215
Gain from acquisitions 15,363 -
------ ---
(Loss)/Income from continuing
operations before extraordinary
item (146,799) (66,429)
(Loss)/income from discontinued
operations (49) 656
Gain on sale from discontinued
operations - -
--- ---
Consolidated net (loss)/income (146,848) (65,773)
Less: net (loss)/income
attributable to the non-
controlling interests 7,963 4,539
Preferred stock dividends (5,231) (5,231)
------ ------
Net (loss)/income attributable
to NorthStar Realty Finance
Corp. common stockholders ($144,116) ($66,465)
========= ========
Net (loss)/income per common
share attributable to NorthStar
Realty Finance Corp. common
stockholders (basic/diluted) ($1.87) ($0.95)
====== ======
Weighted average number of
shares of common stock:
Basic 77,139,868 69,896,439
Diluted 82,364,109 77,356,187

Nine Months Ended
September 30,
-------------
2010 2009
---- ----
(unaudited) (unaudited)
Revenues and other income:
Interest income $207,087 $106,836
Interest income - related
parties 1,033 13,129
Rental and escalation income 89,980 72,904
Advisory and management fee
income - related parties 1,666 5,423
Commission income 2,233 -
Other revenue 2,340 552
----- ---
Total revenues 304,339 198,844
Expenses:
Interest expense 100,054 92,448
Real estate properties -
operating expenses 24,950 9,086
Asset management fees - related
parties 466 2,536
Commission expense 1,677 -
Impairment on operating real
estate 1,180 -
Provision for loan losses 136,134 62,691
General and administrative:
Salaries and equity-based
compensation (1) 40,708 33,805
Auditing and professional fees 9,299 6,440
Other general and administrative 14,239 9,778
------ -----
Total general and administrative 64,246 50,023
Depreciation and amortization 25,467 34,217
------ ------
Total expenses 354,174 251,001
Income/(loss) from operations (49,835) (52,157)
Equity in earnings/(loss) of
unconsolidated ventures 6,155 (1,522)
Unrealized (loss)/gain on
investments and other (206,408) 1,709
Realized gain on investments and
other 109,766 89,411
Gain from acquisitions 15,363 -
------ ---
(Loss)/Income from continuing
operations before extraordinary
item (124,959) 37,441
(Loss)/income from discontinued
operations 52 1,986
Gain on sale from discontinued
operations 2,528 -
----- ---
Consolidated net (loss)/income (122,379) 39,427
Less: net (loss)/income
attributable to the non-
controlling interests 1,018 (9,816)
Preferred stock dividends (15,694) (15,694)
------- -------
Net (loss)/income attributable
to NorthStar Realty Finance
Corp. common stockholders ($137,055) $13,917
========= =======
Net (loss)/income per common
share attributable to NorthStar
Realty Finance Corp. common
stockholders (basic/diluted) ($1.80) $0.21
====== =====
Weighted average number of
shares of common stock:
Basic 76,211,705 67,445,995
Diluted 82,287,543 74,905,800

(1) The three months ended September 30, 2010 and 2009 include $3,894
and $5,007 respectively, of equity-based compensation expense. The
nine months ended September 30, 2010 and 2009 include $13,133 and
$15,471 respectively, of equity-based compensation expense. The
nine months ended September 30, 2010 includes $3,583 of cash
compensation expense and $1,014 of equity based compensation expense
relating to a separation and consulting agreement with a former
executive.

NorthStar Realty Finance Corp.

September December
Consolidated Balance Sheets 30, 31,
($ in thousands) 2010 2009
---- ----
(unaudited)
ASSETS:
Cash and cash equivalents $135,200 $138,928
Restricted cash (includes $377,260 and
$74,453 from consolidated VIEs,
respectively) 431,139 129,180
Operating real estate, net 957,416 978,902
Available for sale securities, at fair value
(includes $1,504,382 and $283,184 from
consolidated VIEs, respectively) 1,525,303 336,220
Real estate debt investments, net (includes
$1,687,009 and $1,356,038 from consolidated
VIEs, respectively) 1,841,416 1,936,482
Real estate debt investments, held-for-
sale (includes $37,821 and $ - from
consolidated VIEs, respectively) 37,821 611
Investments in and advances to
unconsolidated ventures 98,641 38,299
Receivables, net of allowance of $781 in
2010 and $1,349 in 2009 (includes net
$27,382 and $7,421 from consolidated VIEs,
respectively) 32,083 17,912
Unbilled rents receivable 10,211 10,206
Derivative instruments, at fair value
(includes $29 and $-from consolidated
VIEs, respectively) 29 -
Deferred costs and intangible assets, net 57,231 57,551
Assets of properties held for sale (includes
$5,683 and $-from consolidated VIEs,
respectively) 5,683 -
Other assets (includes $2,923 and $2,888
from consolidated VIEs, respectively) 27,172 25,273
------ ------
Total assets $5,159,345 $3,669,564
========== ==========

LIABILITIES:
Mortgage notes and loans payable 804,835 795,915
Exchangeable senior notes 126,655 125,992
Bonds payable, at fair value (includes
$1,963,042 and $584,615 from consolidated
VIEs, respectively) 1,963,042 584,615
Secured term loans 36,881 368,865
Liability to subsidiary trusts issuing
preferred securities, at fair value 170,629 167,035
Obligations under capital leases 1,818 3,527
Accounts payable and accrued expenses
(includes $20,460 and $1,631 from
consolidated VIEs, respectively) 53,160 30,071
Escrow deposits payable (includes $71,220
and $28,608 from consolidated VIEs,
respectively) 71,705 39,461
Derivative liability, at fair value
(includes $218,968 and $46,187 from
consolidated VIEs, respectively) 256,952 67,044
Liabilities of properties held for sale
(includes $153 and $-from consolidated
VIEs, respectively) 153 -
Other liabilities (includes $8,609 and $358
from consolidated VIEs, respectively) 28,904 28,399
------ ------
Total liabilities 3,514,734 2,210,924

EQUITY:
NorthStar Realty Finance Corp. Stockholders'
Equity:
8.75% Series A preferred stock, $0.01 par
value, $25 liquidation preference per
share, 2,400,000 shares issued and
outstanding at September 30, 2010 and
December 31, 2009, respectively 57,867 57,867
8.25% Series B preferred stock, $0.01 par
value, $25 liquidation preference per
share, 7,600,000 shares issued and
outstanding at September 30, 2010 and
December 31, 2009, respectively 183,505 183,505
Common stock, $0.01 par value, 500,000,000
shares authorized, 77,161,103 and
74,882,600 shares issued and outstanding at
September 30, 2010 and December 31, 2009,
respectively 772 749
Additional paid-in capital 699,221 662,805
Retained earnings 572,665 460,915
Accumulated other comprehensive loss (50,350) (92,670)
------- -------
Total NorthStar Realty Finance Corp.
Stockholders' Equity 1,463,680 1,273,171
Non-controlling interest 180,931 185,469
------- -------
Total equity 1,644,611 1,458,640
--------- ---------
Total liabilities and stockholders' equity $5,159,345 $3,669,564
========== ==========

Three Months Ended
September 30,
-------------
2010 2009
---- ----
Funds from Operations:
Income from continuing operations
before extraordinary item ($146,799) ($66,429)
Non-controlling interest in joint
ventures (1,853) (2,555)
------ ------
Consolidated net income/(loss)
before non-controlling interest
in operating partnership (148,652) (68,984)
Adjustments:
Preferred stock dividends (5,231) (5,231)
Depreciation and amortization 8,621 3,148
Funds from discontinued operations (46) 1,220
Real estate depreciation and
amortization - unconsolidated
ventures 237 247
--- ---
Funds from Operations (145,071) (69,600)
-------- -------

Adjusted Funds from Operations:
Funds from Operations ($145,071) ($69,600)
Straight-line rental income, net (341) (562)
Straight-line rental income,
discontinued operations
Straight-line rental income and
fair value lease revenue,
unconsolidated ventures (18) (22)
Amortization of equity-based
compensation 3,894 5,007
Amortization of above/below market
leases (213) (304)
Unrealized (gains)/losses from
mark-to-market adjustments 169,431 83,351
Unrealized (gains)/losses from
mark-to-market adjustments,
unconsolidated ventures - 1,652
Gain from acquisitions (15,363) -
Adjusted Funds from Operations $12,319 $19,522
======= =======

FFO per share of common stock ($1.76) ($0.90)
AFFO per share of common stock $0.15 $0.25

Nine Months Ended
September 30,
-------------
2010 2009
---- ----
Funds from Operations:
Income from continuing operations
before extraordinary item ($124,959) $37,441
Non-controlling interest in joint
ventures (8,780) (6,995)
------ ------
Consolidated net income/(loss)
before non-controlling interest
in operating partnership (133,739) 30,446
Adjustments:
Preferred stock dividends (15,694) (15,694)
Depreciation and amortization 25,467 34,217
Funds from discontinued operations 52 3,677
Real estate depreciation and
amortization - unconsolidated
ventures 711 741
--- ---
Funds from Operations ($123,203) $53,387
--------- -------

Adjusted Funds from Operations:
Funds from Operations ($123,203) $53,387
Straight-line rental income, net (1,248) (1,733)
Straight-line rental income,
discontinued operations
Straight-line rental income and
fair value lease revenue,
unconsolidated ventures (63) (79)
Amortization of equity-based
compensation 13,133 15,471
Amortization of above/below market
leases (691) (466)
Unrealized (gains)/losses from
mark-to-market adjustments 135,654 (15,059)
Unrealized (gains)/losses from
mark-to-market adjustments,
unconsolidated ventures 3,357 10,145
Gain from acquisitions (15,363) -
Adjusted Funds from Operations $11,576 $61,666
======= =======

FFO per share of common stock ($1.50) $0.71
AFFO per share of common stock $0.14 $0.82

Non-GAAP Financial Measures

Included in this press release are certain "non-GAAP financial measures," which are measures of NorthStar's historical or future financial performance that are different from measures calculated and presented in accordance with accounting principles generally accepted in the United States, or U.S. GAAP, within the meaning of applicable SEC rules. These include: (i) Funds From Operations; (ii) Adjusted Funds From Operations; (iii) Return on Average Common Book Equity; and (iv) Return on Average Common Book Equity by business line. The following discussion defines these terms, which NorthStar believes can be useful measures of its performance.

Funds from Operations (FFO) and Adjusted Funds from Operations (AFFO)

Management believes that funds from operations, or FFO, and adjusted funds from operations, or AFFO, each of which are non-GAAP measures, are additional appropriate measures of the operating performance of a REIT and NorthStar in particular. We compute FFO in accordance with the standards established by the National Association of Real Estate Investment Trusts (NAREIT), as net income or loss (computed in accordance with GAAP), excluding gains or losses from sales of depreciable properties, the cumulative effect of changes in accounting principles, real estaterelated depreciation and amortization, and after adjustments for unconsolidated/uncombined partnerships and joint ventures. AFFO, as defined by NAREIT, is a computation made by analysts and investors to measure a real estate company's cash flow generated by operations.

NorthStar calculates AFFO by subtracting from or adding to FFO:

normalized recurring expenditures that are capitalized by NorthStar and then amortized, but which are necessary to maintain NorthStar's properties and revenue stream, e.g., leasing commissions and tenant improvement allowances;

an adjustment to reverse the effects of the straightlining of rents and fair value lease revenue;

the amortization or accrual of various deferred costs including intangible assets and equity-based compensation;

an adjustment to reverse the effects of acquisition gains or losses; and

an adjustment to reverse the effects of non-cash unrealized gains/(losses).

NorthStar's calculation of AFFO differs from the methodology used for calculating AFFO by certain other REITs and, accordingly, our AFFO may not be comparable to AFFO reported by other REITs.

Neither FFO nor AFFO is equivalent to net income or cash generated from operating activities determined in accordance with U.S. GAAP. Furthermore, FFO and AFFO do not represent amounts available for management's discretionary use because of needed capital replacement or expansion, debt service obligations or other commitments or uncertainties. Neither FFO nor AFFO should be considered as an alternative to net income as an indicator of NorthStar's operating performance or as an alternative to cash flow from operating activities as a measure of NorthStar's liquidity.

Return on Average Common Book Equity

NorthStar calculates return on average common book equity ("ROE") on a consolidated basis and for each of NorthStar's major business lines. NorthStar believes that ROE provides investors and management with a good indication of the performance of the Company and its business lines because it provides the best approximation of cash returns on common equity invested. Management also uses ROE, among other factors, to evaluate profitability and efficiency of equity capital employed, and as a guide in determining where to allocate capital within its business. ROEs may fluctuate from quarter to quarter based upon a variety of factors, including the timing and amount of investment fundings, repayments and asset sales, capital raised and leverage used, and the yield on investments funded.

NorthStar urges investors to carefully review the GAAP financial information included as part of the Company's Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and quarterly earnings releases.

Return on Average Common Book Equity (including and excluding G&A)
($ in thousands)

Three
Months
Ended
September Annualized
30, 2010 (1)
--------- -----------
Adjusted Funds from
Operations (AFFO) $12,319 $49,276 (A)
Plus: General &
administrative expenses 19,971
Less: Equity-based
compensation included in
G&A 3,894

AFFO, excluding G&A 28,396 113,584 (B)

Average Common Book Equity
& Operating Partnership
Non-Controlling Interest
(2) $1,297,653 (C)

Return on Average Common
Book Equity (including
G&A) 3.8% (A)/(C)
Return on Average Common
Book Equity (excluding
G&A) 8.8% (B)/(C)

(1) Annualized numbers are calculated by taking the current quarter
amounts and multiplying by four.
(2) Average Common Book Equity & Operating Partnership Non-
Controlling Interest computed using beginning and ending of period
balances. ROE will be impacted by the timing of new investment
closings and repayments during the quarter.

Return on Average Common Book Equity by Business Segment (Pre-G&A)
Including and Excluding Mark-to-Market Adjustments, Credit Loss
Reserves, and Accumulated Depreciation
and Amortization
($ in thousands)

Lending Securities Healthcare
Net
------- ---------- Lease
------
AFFO, Pre-G&A ($13,601) $33,504 $2,478
Annualized (A) (54,404) 134,016 9,912
Average common book
equity and operating
partnership non-
controlling interest (B)
(2) $755,789 $320,819 $25,660
Allocated cumulative
mark-to-market
adjustments for assets,
liabilities and interest
rate swaps (431,784) (243,341) (42,594)
Accumulated depreciation
and amortization - - 66,510
--- --- ------

Average common book
equity and operating
partnership non-
controlling interest
excluding mark-to-
market adjustments,
credit loss reserves,
and accumulated
depreciation and
amortization (C) (2) $324,004 $77,478 $49,575

ROE, Net (A/B) NEG 41.8% 38.6%
ROE, Gross (A/C) NEG 173.0% 20.0%

Core
Net Corporate/ Total
Lease Other (1) -----
----- ---------
AFFO, Pre-G&A $1,104 $4,911 $28,396
Annualized (A) 4,416 19,644 113,584
Average common book
equity and operating
partnership non-
controlling interest (B)
(2) $47,914 $147,471 $1,297,653
Allocated cumulative
mark-to-market
adjustments for assets,
liabilities and interest
rate swaps (47,145) (41,973) (806,837)
Accumulated depreciation
and amortization 67,939 - 134,449
------ --- -------

Average common book
equity and operating
partnership non-
controlling interest
excluding mark-to-
market adjustments,
credit loss reserves,
and accumulated
depreciation and
amortization (C) (2) $68,709 $105,499 $625,265

ROE, Net (A/B) 9.2% 13.3% 8.8%
ROE, Gross (A/C) 6.4% 18.6% 18.2%

(1) Corporate /other average common book equity and operating
partnership non-controlling interest includes $135 million of
unrestricted cash and AFFO includes a $7.5 million gain on sale of
corporate lending venture.
(2) Average common book equity & operating partnership non-
controlling interest computed using beginning and ending of period
balances. ROE will be impacted by the timing of new investment
closings and repayments during the quarter.

Management Fees From NorthStar CDO Financings at September 30, 2010
($ in thousands)

Annualized
Fee -
Based Annual Management Fee % Management Fee
-----------------------
Assets Senior Subordinate Total Revenue
------ ------ ----------- ----- -------
N-Star I $253,207 0.15% 0.20% 0.35% $886
N-Star II (1) 272,668 0.15% 0.20% 0.35% 954
N-Star III 411,056 0.15% 0.20% 0.35% 1,439
N-Star IV 462,372 0.15% 0.20% 0.35% 1,618
N-Star V 411,056 0.15% 0.20% 0.35% 1,439
N-Star VI 483,706 0.15% 0.25% 0.40% 1,935
N-Star VII 644,346 0.15% 0.20% 0.35% 2,255
N-Star VIII 985,464 0.15% 0.25% 0.40% 3,942
N-Star IX (2) 785,852 0.15% 0.25% 0.40% 3,143
CSE RE 2006-A
(1) (3) 1,175,173 0.15% 0.25% 0.40% 4,701

Total $5,884,900 $22,312
========== =======

(1) Subordinate management fees not received for the third quarter
due to noncompliance with overcollateralization test.
(2) As of September 30, 2010 NorthStar consolidated and has elected
the fair value option for the available for sale securities and
bonds payable.
(3) NorthStar also received $0.8 million of special servicing fees
and $0.2 million of advancing agent fees during the third quarter.

NorthStar CDO Financings Cash Distributions and Coverage Test Summary
($ in thousands)

Cash
Distributions
(1)
--------------
Primary Quarter Ended
Collateral September 30,
Type 2010
---- ----

N-Star I CMBS $32
N-Star II CMBS 0
N-Star III CMBS 1,581
N-Star IV Loans 2,111
N-Star V CMBS 1,183
N-Star VI Loans 1,108
N-Star VII CMBS 2,235
N-Star VIII Loans 3,778
N-Star IX CMBS 2,153
CSE RE 2006-A Loans 0

Quarterly
Interest
Coverage Overcollateralization
Cushion (2) Cushion
----------- -------
September
September 30, 30, At
Offering
2010 2010 (3)
---- ---- ---------

N-Star I $69 ($2,227) $8,687
N-Star II (182) (7,867) 10,944
N-Star III 1,715 31,521 13,610
N-Star IV 2,474 91,339 19,808
N-Star V 1,335 28,100 12,940
N-Star VI 3,452 49,496 17,412
N-Star VII 1,793 29,196 13,966
N-Star VIII 5,279 130,421 42,193
N-Star IX 2,445 53,812 24,516
CSE RE 2006-A 8,008 (123,693) (151,595)

Table shows cash distributions to the retained income notes. Interest
coverage and overcollateralization coverage to the most constrained
class.
(1) Cash distributions are exclusive of senior management fees which
are not subject to the coverage tests.
(2) Quarterly interest cushion and overcollateralization cushions
from remittance report issued on date nearest to September 30, 2010.
(3) CSE RE 2006-A based on trustee report as of June 24, 2010.

`
CMBS Vintages Under Management
($ in thousands)

$ % Cumulative
--- --- ----------
1996 $6 0.0% 0.0%
1997 40,141 1.4% 1.4%
1998 80,347 2.9% 4.3%
1999 30,456 1.2% 5.5%
2000 121,191 4.3% 9.8%
2001 95,641 3.4% 13.2%
2002 71,869 2.6% 15.8%
2003 118,573 4.3% 20.1%
2004 304,599 10.9% 31.0%
2005 506,688 18.1% 49.1%
2006 838,154 30.1% 79.2%
2007 419,083 15.0% 94.2%
2008 91,346 3.3% 97.5%
2009 69,075 2.5% 100.0%

Total $2,787,169 100.0%

Credit Ratings Distribution of Securities Under Management
($ in thousands)

$ %
--- ---
AAA $73,150 2.2%
AA 53,699 1.6%
A 241,338 7.3%
BBB 700,276 21.1%
BB 674,602 20.4%
B 562,473 17.0%
CCC 364,289 11.0%
CC 252,583 7.6%
C 319,319 9.6%
Below C 75,774 2.2%
------ ---
Total $3,317,503 100.0%

Assets Under Management at September 30, 2010
($ in thousands)

$ %
--- ---
Investment grade securities $1,068,463 14.6%
First mortgage (1) 2,131,881 29.0%
Investment grade net lease (2) 161,845 2.2%
Non-investment grade securities 2,249,039 30.6%
Mezzanine and other subordinate loans (3) 756,186 10.3%
Non-investment grade net lease (2) 976,660 13.3%
Total $7,344,074 100.0%
========== =====

(1) Includes $287 million of junior participations in first
mortgages.
(2) Net lease amounts prior to accumulated depreciation and impact of
purchase price allocations.
(3) Includes $196 million of equity investments primarily related to
real estate loans, equity investments, and real estate owned assets.

Third Quarter Funded Securities Investment Statistics
($ in thousands)

Amount
Invested (1)
------------

CMBS $60,124
REIT Debt 4,199
CDO Debt 1,832

Total Securities $66,155
=======

(1) Par amount was $138 million.

Supplementary Earnings Release Disclosure

CSE RE 2006-A CDO Closing Balance Sheet
($ in thousands)

At Closing
----------
Principal
% of
Balance FMV OPB
------- --- -----

Loan assets - performing $810,690 $380,003 47%
Loan assets - non-performing 243,113 15,970 7%
REO 18,259 4,201
Restricted cash 77,084 77,084
Derivative assets 0 38
Receivables 2,815 2,815
----- -----
Total assets $1,151,961 $480,111

CDO notes outstanding $1,012,490 $440,096 43%
Derivative liabilities 0 11,829
Accounts payable and accrued
expenses 12,528 12,528
------ ------
Total liabilities $1,025,018 $464,453

Non-controlling interest 2,083 295

Net assets $124,860 $15,363 (1)

Management rights NA $7,000

Notes:
------
99% of loan assets are first mortgages having a 5.3% weighted average
interest rate based upon 0.26% one-month LIBOR, 3.25% prime rate
and adjusted for LIBOR floors. Non-performing loans are assumed to
have zero yield for purposes of computing the weighted-average
interest rate.
(1) Recorded as gain from acquisitions.

CSE RE 2006-A CDO Collateral Type As of Closing
($ in thousands)

Principal Balance Principal Balance
Performing Loans Non-Performing Loans
---------------- --------------------
Collateral Type $ % $ %
--------------- --- --- --- ---

Healthcare $261,007 32.2% $0 0.0%
Resort 217,615 26.9% 0 0.0%
Land 146,068 18.0% 192,709 79.3%
Hotel 76,086 9.4% 38,285 15.7%
Multifamily 36,851 4.5% 12,119 5.0%
Retail 10,332 1.3% 0 0.0%
Condo 1,845 0.2% 0 0.0%
Other 60,886 7.5% 0 0.0%

Total assets $810,690 100.0% $243,113 100.0%
======== ===== ======== =====

Book Value Rollforward
($ in thousands, except per share data)

Per
$ Share
--- -----
Common book value at June 30, 2010 (diluted) $1,295,559 $15.73

Adjustment to retained earnings and non-
controlling interest
as a result of consolidation of N-Star CDO IX 160,826 1.95

Net income to common shareholders and non-
controlling interest, excluding non-cash
mark-to-market items included in net income 15,499 0.19

Mark-to-market adjustments included in net income:
CDO notes (78,523) (0.95)
Trust preferred debt (24,766) (0.30)
Securities and investments held at market value (36,040) (0.44)
Swaps and other hedges (30,103) (0.37)

Mark-to-market adjustments in other comprehensive
income and
non-controlling interest:
Effective hedges 1,547 0.02

Common dividends (8,235) (0.10)

Accretion/(dilution) from additional shares issued
during quarter (1) 3,981 0.05
----- ----
Total net increases/(decreases) 4,186 0.05

Common book value at September 30, 2010 (diluted)
(2) $1,299,745 $15.78
========== ======

(1) Primarily relates to amortization of LTIP shares and issuance of
common shares from DRIP and DSPP. Per share dilution as a result of
common shares issued.
(2) Cumulative net mark-to-market adjustments total a positive
$995.1 million ($12.08 per diluted share), credit loss reserves
total a negative $174.7 million ($2.12 per diluted share) and
accumulated real estate depreciation and amortization total a
negative $145.1 million ($1.76 per diluted share) as of September
30, 2010. Excluding all mark-to-market adjustments, credit loss
reserves, and accumulated depreciation and amortization would result
in a $7.58 diluted book value per common share at September 30,
2010.

NRFC NNN Holdings, LLC Portfolio Summary
($ in thousands)

Date
Acquired Tenant or Guarantor of Tenant Location/MSA
-------- ----------------------------- ------------

Two properties in New
Oct-2004 ALGM Portfolio - Various (3) (4) York, NY
Nov-2007 Alliance Data Systems Corp. Columbus, OH
Fort Mill, SC/
Mar-2007 Citigroup, Inc. Charlotte
Jun-2007 Landis Logistics (6) Reading, PA
Jun-2006 Covance, Inc. Indianapolis, IN
Feb-2007 Credence Systems Corp. Milpitas, CA/San Jose
Dick's Sporting Goods, Inc. /
Sep-2006 PetSmart, Inc. (4) 9 properties
2 in MI /1 in CA /1
Sep-2005 Electronic Data Systems Corp. in PA
Springdale, OH/
Dec-2005 Cincom Systems, Inc. (7) Cincinnati
Aug-2005 GSA - U.S. Department of Agriculture Salt Lake City, UT
Northrop Grumman Space & Mission
Jul-2006 Systems Corp. (8) Aurora, CO/Denver
Party City Corp. (Amscan) /Lerner Rockaway, NJ/
Mar-2006 Enterprises, Inc. Northern NJ
Feb-2006 Quantum Corporation (9) Colorado Springs, CO

Total
NRFC
NNN
Holdings,
LLC
Portfolio
==========

Years
Date Square Net Acquisition
Acquired Feet Lease (1) Cost (2)
-------- ---- --------- --------

Oct-2004 25,165 0.7-5.8 $7,710 (5)
Nov-2007 199,112 7.2 33,826
Mar-2007 165,000 10.1 34,303
Jun-2007 609,000 6.3 28,473
Jun-2006 333,600 15.3 34,519
Feb-2007 178,213 6.4 30,144
Sep-2006 467,971 5.3-13.9 64,503
Sep-2005 387,842 5.0 62,718
Dec-2005 486,963 11.3 69,341
Aug-2005 117,553 1.6 22,424
Jul-2006 183,529 4.8 43,625
Mar-2006 121,038 4.7-6.8 21,955
Feb-2006 406,207 2.2-10.4 27,635

Total
NRFC
NNN
Holdings,
LLC
Portfolio 3,681,193 7.1 $481,176
========== ========= === ========

Acquisition
Cost
Date Existing less
Acquired Debt Debt
-------- ---- ----

Oct-2004 $0 $7,710
Nov-2007 23,309 10,518
Mar-2007 30,252 4,051
Jun-2007 18,710 9,763
Jun-2006 27,881 6,638
Feb-2007 21,759 8,385
Sep-2006 47,911 16,592
Sep-2005 46,413 16,304
Dec-2005 51,480 17,862
Aug-2005 15,165 7,259
Jul-2006 33,583 10,042
Mar-2006 16,944 5,010
Feb-2006 17,971 9,664

Total
NRFC
NNN
Holdings,
LLC
Portfolio $351,378 $129,799
========== ======== ========

(1) Remaining lease terms as of September 30, 2010. Total represents
weighted average based on acquisition cost.
(2) Acquisition cost does not include purchase price allocations.
(3) On May 18, 2010, a 10,800 square foot property in the portfolio
sold for $3.3 million, and the proceeds are being held in escrow for
use in acquiring a suitable replacement property.
(4) The two ALGM portfolio properties, and six of ten Dick's Sporting
Goods, Inc. /PetSmart, Inc. properties are ground lease interests.
(5) The two ALGM properties were owned by NorthStar's predecessor
prior to NorthStar's initial public offering. The value in
acquisition cost column reflects the undepreciated book value when
the properties were transferred to a subsidiary of NRFC NNN
Holdings, LLC at the time of NorthStar's initial public offering
(10/29/04).
(6) Landis Logistics commenced a seven year lease on January 5, 2010
for 105,000 square feet.
(7) As of March 15, 2010, General Electric Co. vacated approximately
312,409 square feet of space.
(8) The Northrop Grumman Space & Mission Systems Corp. property is
financed with a $32.6 first mortgage with a third party and a $0.9
million mezzanine loan held by a consolidated NorthStar entity.
(9) Dollar amounts shown are 50% of total values, representing NRFC
NNN Holding's, LLC subsidiary's 50% interest in a joint venture with
an institutional investor.

Portfolio Cash Flow and Tenant Credit Profile

Three Months Ended September 30,
($ in thousands) 2010
---------------------------------
NOI
Less
Tenant or Guarantor of Base Debt Debt
Tenant Rent NOI Service Service
----- --- -------- --------

ALGM Portfolio -
Various $469 $315 - $315
Alliance Data Systems
Corp. 582 581 (455) 126
Citigroup, Inc. 525 523 (501) 22
Landis Logistics (2) 52 (94) (332) (426)
Covance, Inc. 608 607 (517) 90
Credence Systems Corp. 674 673 (447) 226
Dick's Sporting Goods,
Inc. /PetSmart, Inc. 1,285 1,253 (974) 280
Electronic Data Systems
Corp. 1,372 1,370 (824) 546
Cincom Systems, Inc.
(7) 567 232 (862) (630)
GSA -U.S. Department
of Agriculture 579 452 (302) 149
Northrop Grumman Space
& Mission Systems
Corp. 814 814 (701) 113
Party City Corp.
(Amscan) /Lerner
Enterprises, Inc. 441 439 (304) 135
Quantum Corporation
(50%) 608 605 (326) 279

Total $8,576 $7,771 (6,545) $1,226
====== ====== ====== ======

($ in thousands) Primary Tenant
--------------
Actual
Market Credit
Tenant or Guarantor of Tenant Cap (1) Rating
------- -------

ALGM Portfolio - Various mixed tenants
Alliance Data Systems Corp. $3,510 not rated
Citigroup, Inc. 113,584 A/A3
Landis Logistics (2) N/A (3) not rated
Covance, Inc. 3,098 not rated (4)
Credence Systems Corp. 307 not rated
Dick's Sporting Goods, Inc. /
PetSmart, Inc. 3,354 not rated (5)
Electronic Data Systems Corp. 13,900 not rated (6)
Cincom Systems, Inc. (7) N/A (3) not rated
GSA -U.S. Department of implied
Agriculture N/A AAA
Northrop Grumman Space & Mission
Systems Corp. 17,900 BBB+/Baa1
Party City Corp. (Amscan) /Lerner
Enterprises, Inc. 362 (8) B/B2 (9)
Quantum Corporation (50%) 583 B-/B3

Total

(1) Based on information from Bloomberg at close of market on
September 30, 2010.
(2) Landis Logistics lease includes first four months full rent
abatement and four additional months of half rent abatement in the
first year of the lease.
(3) Privately-held company, market capitalization information is not
publicly disclosed.
(4) Covance has a $1.5 billion net worth and no long-term debt
according to its June 30, 2010 financial statements.
(5) PetSmart, Inc. is rated BB by S&P.
(6) In August 2008, Hewlett-Packard Co. purchased Electronic Data
Systems for $13.9 billion. During the first quarter of 2010, ratings
for EDS were withdrawn.
(7) As of March 15 , 2010, General Electric Co. vacated
approximately 312,409 square feet of space. GE's quarterly base rent
had been $771,000.
(8) In December 2005, Amscan Holdings, Inc. (controlled by Berkshire
Partners and Weston Presidio) purchased Party City for $362 million.
(9) The Party City Corp. lease is guaranteed by Amscan Holdings, Inc.
which has a B/B2 credit rating by S&P and Moody's, respectively.

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 will be specified in the Company's Annual Report on Form 10-K for the year ended December 31, 2009. 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.

SOURCE NorthStar Realty Finance Corp.

Copyright (C) 2010 PR Newswire. All rights reserved

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Doubts grow over wisdom of Ben Bernanke ‘super-put’

Meanwhile, the price of US crude oil jumped $2.5 a barrel to $87. It is up
20pc since markets first concluded in early September that QE2 was a done
deal.

This amounts to a tax on US consumers, transferring US income to Mid-East
petro-powers. Copper has behaved in much the same way. So have sugar, soya,
and cotton.

The dollar plunged yet again. That may have been the Feds unstated purpose.
If so, Washington has angered the worlds rising powers and prompted a
reaction with far-reaching strategic consequences.

Li Deshui from Beijings Economic Commission said a string of Asian states
share Chinas deep bitterness over dollar debasement, and are
examining ways of teaming up to insulate themselves from the tsunami of US
liquidity. Thailand said its central bank is already in talks with
neighbours to devise a joint protection policy.

Brazils central bank chief Henrique Mereilles said the US move had created excessive
dollar liquidity which we are absorbing, forcing his country to
restrict inflows. Mexicos finance minister warned of more bubbles.

These countries cannot easily shield themselves from the inflationary effect
of QE2 by raising interest rates since this leads to further carry
trade inflows in search of yield. They are being forced to eye capital
controls, with ominous implications for the interwoven global system.

In London and Frankfurt the verdict was just as harsh. In our view, this
is one of the greatest policy mistakes in the Feds history, said Toby
Nangle from Baring Asset Management.

The Fed
is gambling that the so-called portfolio balance channel effect
pushing money out of government bonds and into other assets will lift risk
asset prices. The gamble is that this boosts profits and wages, rather than
simply prices. We remain unconvinced. How will a liquidity solution correct
a solvency problem? he said.

A policy error, said Ulrich Leuchtmann from Commerzbank. The
wording of the Fed statement is potentially dangerous because it
leaves the door open to a further flood of Treasury purchases if
unemployment stays high. It is a bottomless pit, he said.

Of course, it is precisely this open door that has so juiced risk trades, from
Australian dollar futures, to silver contracts, and junk bonds. Goldman
Sachs thinks QE2 will ultimately reach $2 trillion, with no exit until 2015.
Such moral hazard is irresistible. It is the Bernanke super-put.

Yet the reluctance of investors to leap back into the US Treasury market as
they did after QE1 is revealing. The 30-year segment of the Treasury market
is too small to matter, but symbolism does matter. Vigilantes sniff stealth
default. If long bond investors continue to throw their collective
toys out of the cot, it risks upending the Feds policy, said Michael
Derk from FXPro.

Mr Bernanke is targeting maturities of 5 to 10 years with purchases of
Treasuries. These bonds have behaved better: 10-year yields fell 14 points
on Thursday to 2.48pc. However, Mark Ostwald from Monument Securities said
foreign funds may take advantage of QE2 to dump their holdings on the Fed,
rotating the money emerging markets rather than US assets.

Bond funds are already restive. Pimcos Bill Gross says the great bull market
in bonds is over, denigrating Fed policy as the greatest ponzi scheme
in history. Warren Buffett has chimed in too, warning that anybody buying
bonds at this stage is making a big mistake,

Fed chair Ben Bernanke uses the term credit easing to describe his strategy
because the goal is to lower borrowing costs. If he fails to achieve this
over coming months – because investors balk – the policy will backfire.

No clear rationale for fresh QE can be found in orthodox monetarism. Data from
the St Louis Federal Reserve show that M2 money supply stopped contracting
in the early summer and has since been expanding at an accelerating rate,
topping 9pc over the last four-week bloc.

The Fed has used the Taylor Rule on output gaps as a theoretical
justification for QE, but Stanford Professor John Taylor has more or less
said his theories have been hijacked. I dont think (QE) will do much
good, and I also worry about the harm down the road, he said.

It has not been lost on markets that the Feds purchases of $900bn of
Treasuries by June (with reinvested funds from mortgage debt) covers the
Treasurys deficit over the same period. The slipperly slope towards
monetization of public debt beckons.

Global investors mostly accepted that the motive for QE1 was emergency
liquidity, and that stimulus would later be withdrawn. But there are growing
suspicions that QE2 is Treasury funding in disguise.

If they start to act on this suspicion, they could push rates higher instead
of lower, and overwhelm the Bernanke stimulus. That would precipitate an
ugly chain of events for the US.

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Thai Finance Minister Says APEC To Discuss Currencies

KYOTO, Japan (Dow Jones)–Thailand’s finance minister said Friday that the issue of currencies will be on the agenda at a meeting of APEC finance ministers taking place Friday and Saturday …

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