Element Fleet Management announces $100M bought deal

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By CPE News

Toronto (pcJ News Briefs) – Element Fleet Management Corp. (TSX: EFN), formerly Element Financial Corporation, has entered into an agreement with a syndicate of underwriters led by BMO Capital Markets, CIBC Capital Markets, National Bank Financial Inc., RBC Capital Markets, and TD Securities Inc. for a bought deal of 4,000,000 Cumulative 5-Year Minimum Rate Reset Preferred Shares, Series I at $25.00 per share for gross proceeds of $100,000,000.

The closing date of the offering is expected to be on or about May 5, 2017.

Net proceeds are expected to be used to fund the growth of Element’s business and for general corporate purposes.

Element has granted the underwriters an option to purchase at the offering price up to an additional 2,000,000 Series I Preferred Shares exercisable, in whole or in part, at any time up to 48 hours prior to closing of the offering. Should the option be fully exercised, the total gross proceeds of the Series I Preferred Share offering will be $150,000,000.

The Series I Preferred Share holders will be entitled to receive fixed cumulative preferential cash dividends, payable by quarterly installments for an initial period of five years, as and when declared, at a rate of $1.4375 per share per annum, to yield 5.75% annually. Thereafter, the dividend rate will reset every five years to the sum of the then current 5-Year Government of Canada Bond yield and 4.64%, provided that, in any event, such sum shall not be less than 5.75%. On June 30, 2022, and on June 30 of every fifth year thereafter, Element Fleet Management may redeem the Series I Preferred Shares in whole or in part at par.

Holders will have the right to elect to convert all or any of their Series I Preferred Shares into an equal number of Cumulative Floating Rate Preferred Shares, Series J on June 30, 2022, and on June 30 of every fifth year thereafter.

Element Fleet Management is a global fleet management company, providing world-class management services and financing for commercial vehicle and equipment fleets.

photo credit: Element Fleet Management