Element Taps Rated Debt Market for $2.25B

Element Financial closed the issuance of $1.0 billion in rated term notes through Chesapeake Funding II LLC and closed the renewal of its asset-backed funding facility with the company’s lending syndicate which was expanded by $1.25 billion. Together, the two commitments amount to a $2.25 million expansion of Element’s fleet funding capacity.

Strong demand for the notes allowed Element to double the size of the offering with interest rate spreads that narrowed by 15 to 25 basis points from its most recent fleet ABS transaction. This brings the total amount of funding completed through Chesapeake II to $3.5 billion since its inception in December of last year.

“Subsequent to these issuances, the company has un-drawn commitments of $4.0 billion under our Chesapeake facilities,” said Michel Beland, Element’s chief financial officer. “Our ABS investors have clearly signaled their appetite for a regular cadence of high quality fleet ABS offerings through Chesapeake that we expect to bring to market every three to four months.”

RBC Capital Markets, BofA Merrill Lynch, BNP Paribas and J.P. Morgan acted as joint bookrunners for the term note transaction together with CIBC Capital Markets and TD Securities as co-managers.

The expansion and extension of the lending syndicate facility was led by Deutsche Bank and J.P. Morgan.

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