Element Financial Announces Closing of Offering of Subscription Receipts, Debentures and Series E Preferred Shares for Aggreg...

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UNITED STATES. 


This news release does not constitute an offer to sell or a solicitation of an
offer to buy any of the securities in the United States. The securities have not
been and will not be registered under the United States Securities Act of 1933,
as amended (the "U.S. Securities Act") or any state securities laws and may not
be offered or sold within the United States or to U.S. Persons unless registered
under the U.S. Securities Act and applicable state securities laws or an
exemption from such registration is available.


Element Financial Corporation (TSX:EFN) ("Element" or the "Company"), one of
North America's leading equipment finance companies, announced today that it has
closed its previously announced prospectus offering (the "Offering") of
subscription receipts ("Subscription Receipts"), 5.125% extendible convertible
unsecured subordinated debentures ("Debentures") and 6.40% cumulative 5-year
rate reset preferred shares, Series E ("Series E Shares"). The Offering raised
gross proceeds of $1.42 billion, which proceeds will be used principally to fund
Element's previously announced acquisition of PHH Corporation's (PHH) North
American fleet management services business (the "Acquisition") and to finance
the Company's stronger than forecast organic growth. 


Element issued, on a bought deal basis, a total of (i) 74,416,500 Subscription
Receipts at a price of $12.75 per Subscription Receipt for gross proceeds of
approximately $949.0 million; (ii) $345,000,000 aggregate principal amount of
Debentures; and (iii) 5,000,000 Series E Shares at a price of $25.00 per share
for gross proceeds of $125,000,000. The Offering included the exercise in full
by the Subscription Receipt Underwriters and the Debenture Underwriters (each as
defined below) of the 15% over-allotment options to purchase (i) an additional
9,706,500 Subscription Receipts, and (ii) an additional $45.0 million aggregate
principal amount of Debentures, each on the same terms as the initial offering,
resulting in additional gross proceeds of $168.75 million.


"Deploying this capital to close the acquisition of PHH's North American fleet
management business more than doubles our asset base to $10 billion and sets
Element on a course to deliver increased leverage, reduced funding costs and
strong origination growth from each of our four business verticals - Commercial
& Vendor Finance, Aviation Finance, Railcar Finance and Fleet Management," said
Steven K. Hudson, Element's Chairman and Chief Executive Officer.


Element anticipates that its tangible leverage will increase to 4.0:1 on closing
of the Acquisition, which is expected to occur on or before July 31, 2014.
Assuming anticipated continued organic growth in each of its four North American
verticals, Element expects to grow its balance sheet to achieve a target
tangible leverage ratio of 5.5:1 by December 31, 2016.


On June 2, 2014, Element entered into a definitive agreement with PHH to acquire
the PHH Arval fleet management services business for approximately US$1.4
billion. Pursuant to the Acquisition, Element will also assume, subject to
certain conditions, certain financing programs and securitization conduits of
PHH related to the fleet management business. Upon completion of the
Acquisition, Element will add more than US$4.6 billion in total assets to its
balance sheet. See Element's press release dated June 2, 2014 entitled "Element
Signs Definitive Agreement to Acquire PHH's North American Fleet Management
Business".


The offering of the Subscription Receipts was conducted by a syndicate of
underwriters co-led by BMO Nesbitt Burns Inc., CIBC World Markets Inc., GMP
Securities L.P., Barclays Capital Canada Inc., National Bank Financial Inc. and
TD Securities Inc. and including Credit Suisse Securities (Canada) Inc., RBC
Dominion Securities Inc., Scotia Capital Inc., Cormark Securities Inc. and
Manulife Securities Incorporated (the "Subscription Receipt Underwriters"). The
offering of the Debentures was conducted by a syndicate of underwriters co-led
by BMO Nesbitt Burns Inc., CIBC World Markets Inc., GMP Securities L.P.,
National Bank Financial Inc. and TD Securities Inc. and including Barclays
Capital Canada Inc., Credit Suisse Securities (Canada) Inc., RBC Dominion
Securities Inc., Scotia Capital Inc., Cormark Securities Inc. and Manulife
Securities Incorporated (the "Debenture Underwriters"). The offering of Series E
Shares was conducted by a syndicate of underwriters co-led by BMO Nesbitt Burns
Inc., CIBC World Markets Inc., GMP Securities L.P., National Bank Financial Inc.
and TD Securities Inc. and including RBC Dominion Securities Inc., Scotia
Capital Inc., Cormark Securities Inc. and Manulife Securities Incorporated.


Further details concerning the Subscription Receipts, the Debentures, the Series
E Shares and the Acquisition are set out in Element's short form prospectus
dated June 11, 2014, available on SEDAR at www.sedar.com. 


The Subscription Receipts, the Debentures and the Series E Shares will commence
trading today on the Toronto Stock Exchange under the symbols "EFN.R", "EFN.DB"
and "EFN.PR.E.", respectively.


About Element Financial Corporation 

With total assets expected to reach $10 billion following the closing of the
Acquisition,, Element Financial Corporation is one of North America's leading
equipment finance companies. Element operates across North America in four
verticals of the equipment finance market - Commercial & Vendor Finance,
Aviation Finance, Railcar Finance and Fleet Management. 


Forward Looking Statements 

This release includes forward-looking statements regarding Element and its
business. Such statements are based on the current expectations and views of
future events of Element's management. In some cases the forward-looking
statements can be identified by words or phrases such as "may", "will",
"expect", "plan", "anticipate", "intend", "potential", "estimate", "believe" or
the negative of these terms, or other similar expressions intended to identify
forward-looking statements. Forward-looking statements in this release include
those related to the acquisition by Element of PHH Corporation's North American
Fleet Management Services business, the benefits arising from that acquisition
and the achievement of anticipated origination, cost of funding and tangible
leverage targets. The forward-looking events and circumstances discussed in this
release may not occur and could differ materially as a result of known and
unknown risk factors and uncertainties affecting Element, including risks
regarding the equipment finance industry, economic factors and many other
factors beyond the control of Element. No forward-looking statement can be
guaranteed. Forward-looking statements and information by their nature are based
on assumptions and involve known and unknown risks, uncertainties and other
factors which may cause our actual results, performance or achievements, or
industry results, to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statement or information. Accordingly, readers should not place undue reliance
on any forward-looking statements or information. Except as required by
applicable securities laws, forward-looking statements speak only as of the date
on which they are made and Element undertakes no obligation to publicly update
or revise any forward-looking statement, whether as a result of new information,
future events, or otherwise.


FOR FURTHER INFORMATION PLEASE CONTACT: 
Element Financial Corporation
John Sadler
Senior Vice President
(416) 386-1067 ext. 2313
jsadler@elementfinancial.ca


Element Financial Corporation
Michel Beland
Chief Financial Officer
(416) 386-1067 ext. 2225
mbeland@elementfinancial.ca
Element Fleet Management (TSX:EFN)
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