Element Financial and its wholly-owned subsidiary Element Rail Leasing, announced that it has closed its first railcar asset-backed securitization (ABS) in the aggregate gross amount of $340.3 million.

The transaction is comprised of three classes of notes with ratings from Standard & Poor’s with two of the three classes, comprising 90% of the notes, carrying an A rating. Together, the notes offer an initial blended coupon of 3.547% and an expected average weighted life of 6.10 years.

The transaction is secured by a portfolio of 4,267 railcars, with an appraised value of $401.5 million, and their related leases. Proceeds from the transaction will be used to reduce Element’s existing funding facilities.

“This very successful offering provides Element with clear access to an important funding source that aligns with the long-life nature of these underlying railcar assets,” said Steven K. Hudson, Element Financial executive chairman and CEO. “Under our strategic alliance with Trinity Industries, Element is expecting to acquire more than $2 billion worth of railcars and related leases over a two-year period and we anticipate tapping the ABS market, utilizing the structure that we now have in place for additional funding as these assets are added to our balance sheet.”

The notes were offered by Credit Suisse Securities as lead arranger.