Element Fleet Management closed the issuance of $1.2 billion rated term notes through Chesapeake Funding II.

The offering marked the largest ABS issuance to date in the fleet lease sector. Strong demand for the notes allowed the company to double the initial launch size of the offering, and pricing spreads on the term notes significantly narrowed from those of the company’s 2016 fleet ABS transactions. Furthermore, participation in the issuance expanded to include a material percentage of investors new to the company and to fleet lease ABS.

“This was an absolutely tremendous outcome. Not only did we achieve record-setting size and solid pricing, but we were able to introduce many new investors to the business that we are building and to the ABS platform that we have established,” said Karen Martin, executive vice president and treasurer. “Going forward, we will use this platform for more frequent term issuance.”

This is the first issuance of term notes under Chesapeake II following the previously announced combination of the company’s U.S. funding platforms in March of this year, and the first time the program was rated by Fitch Ratings, adding to the ratings of Moody’s Investors Service, DBRS and Kroll Bond Rating Agency.

“The transaction was a great success. The strong support shown by our investors bodes well for our U.S. Fleet funding platform and for future growth,” said Bradley Nullmeyer, CEO. “This is a true testament to the platform and, more importantly, the business we have built.”

BofA Merrill Lynch, Credit Agricole Securities, MUFG and Mizuho Securities acted as joint bookrunners for the term note transaction together with HSBC and PNC Capital Markets as co-managers.