Element Financial gets $1.36 billion bridge loans to fund PHH assets

By Susanna Moon

Chicago, June 2 - Element Financial Corp. said it secured commitments for a $1.36 billion secured bridge facility to help finance its acquisition of PHH Corp.'s North American fleet management business.

Element obtained a commitment letter for the syndicated non-revolving facility with Bank of Montreal as agent, according to a company press release.

The security under the bridge agreement will consist of a first-ranking charge over the assets acquired by Element under the acquisition and a second-ranking charge over other assets and interests of Element.

Element said it plans to raise C$1.1 billion of new capital in conjunction with the planned acquisition.

The offerings consist of C$750 million of subscription receipts, C$250 million of convertible debentures and C$100 million of series E preferred shares.

The completion of the company's planned offerings will result in a reduction in amounts available under the bridge agreement to finance the acquisition.

The company also said it obtained lender commitments to amend its revolving credit agreement, consolidating its existing commitments under the senior secured revolving credit facility and non-revolving bridge facility, and providing for an aggregate commitment of C$1 billion and including another C$500 million under the accordion.

Element Financial is a Toronto-based equipment finance company.

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