Financing for US$2 billion worth of railcars to be provided over the
next two years
TORONTO, Dec. 9, 2013 /CNW/ - Element Financial Corporation (TSX: EFN)
("Element" or "the Company"), one of North America's leading equipment
finance companies, today announced that it has entered into a strategic
alliance agreement (the "Agreement") with Dallas-based Trinity
Industries, Inc. (NYSE:TRN) ("Trinity"), the leading railcar
manufacturer and lessor in North America, to provide lease financing
for up to US$2 billion worth of railcars over the next two years.
Under the terms of the Agreement, Element will be presented with
preferred opportunities to enter into lease financings for a
diversified fleet of railcars - including new railcars to be
manufactured by Trinity, existing railcars from Trinity's lease fleet
as well as secondary market purchases. The identification of railcar
assets that meet Element's portfolio requirements will be based on
various diversification criteria including limits on railcar type, use,
lease duration, average age and credit quality of the lessee. Offers of
qualifying railcar assets are to be made to Element on a quarterly
basis for the duration of the Agreement and are subject to acceptance
by Element. Trinity will also provide Element with advisory services
and, in conjunction with Element, will act as servicer with
responsibility for leasing sales, lease renewals, the provision of
maintenance services and portfolio balancing in respect of the railcar
lease portfolio.
"This agreement significantly advances Element's growth strategy by
positioning us with North America's leading railcar manufacturer in a
strategic alliance that is expected to substantially increase our
current portfolio of finance assets over the next two years," noted
Steven K. Hudson, Element's Chairman and CEO. "Railcar financing
complements our other core equipment financing verticals by offering
attractive yields, access to reliable and proven funding structures,
efficient originating and operating costs and low credit losses backed
by long life assets that are in high demand," added Mr. Hudson.
"We are excited to form this strategic alliance with Element, which
shares Trinity's long-term view regarding the attractive nature of
investing in leased railcars," said D. Stephen Menzies, Trinity
Industries, Inc. Senior Vice President and the group president
responsible for Trinity's railcar manufacturing and leasing businesses.
"This agreement is an extension of the railcar financing relationship
that Trinity has had with Element's senior leadership team which began
more than two decades ago," added Mr. Menzies.
The inauguration of the Agreement will commence with Element's
acquisition of approximately US$100 million of existing railcar assets
currently under lease to a diversified Trinity customer base of
US-based shippers and Class 1 railways. This initial financing and
acquisition is expected to be completed on or before December 31, 2013,
subject to customary conditions precedent, with the next tranche
expected to close by the end of the first quarter of 2014.
About Element Financial Corporation
With total assets of approximately $2.7 billion, Element Financial
Corporation is one of North America's leading equipment finance
companies. Element operates across North America in three verticals of
the equipment finance market - Element Capital provides large ticket
equipment financing, Element Finance serves the mid-ticket equipment
finance market and Element Fleet provides vehicle fleet leasing and
management solutions.
About Trinity Industries, Inc.
Trinity Industries, Inc., headquartered in Dallas, Texas, is a
diversified industrial company that owns market-leading businesses
which provide products and services to the energy, transportation,
chemical and construction sectors. Trinity reports its financial
results in five principal business segments: the Rail Group, the
Railcar Leasing and Management Services Group, the Inland Barge Group,
the Construction Products Group, and the Energy Equipment Group. For
more information, visit: www.trin.net.
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 expected financings under the Agreement, the anticipated
increase in Element's finance assets in the future and the completion
of the initial conveyance under the Agreement. 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.
SOURCE Element Financial Corporation
