S&P assigns Element Fleet notes BBB

S&P said it assigned its BBB rating on Element Fleet Management Corp.’s proposed offering of senior unsecured notes due 2025.

The company intends to use the proceeds to repay its debentures due on June 30. Pending such use, Element plans to temporarily reduce borrowings under its senior credit facility.

“We rate the new unsecured notes the same as our BBB issuer credit rating on the company because the amount of nonrecourse secured debt is less than 50% of the capital structure. That said, with C$10.5 billion in vehicle management asset-backed debt, a significant portion of Element’s assets remains encumbered, albeit on a nonrecourse basis,” S&P said in a press release.

The outlook is stable.

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