Element Financial announced that it has received an initial issuer rating of BBB from DBRS Limited (DBRS).The Company also was awarded a rating of R-2 (middle) on its short-term instruments and a rating of Pfd-3 on its perpetual preferred shares. All three ratings were issued with a stable outlook. Notwithstanding the R-2 rating, granted by DBRS, Element does not plan to access the short-term debt market for its funding requirements.

“I was pleased that DBRS cited our leading position in North American fleet management, our better than average credit risk profile and our strengthening earnings profile as key considerations in determining these ratings,” said Steven Hudson, Element’s Chief Executive Officer. “Their report also noted that over the medium-term, these assigned ratings could be positively impacted by further earnings expansion while our credit costs remain within historical levels and our operating efficiency improves,” added Mr. Hudson.

On August 24, 2015, Element entered into a Credit Agreement (the “Facility”) with a syndicate of 24 lenders that provides the Company with an expanded US$8.5 billion senior secured three-year credit facility. Concurrent with the receipt of this initial issuer rating from DBRS, the interest rate applicable to the Facility will be reduced by 35 basis points on top of the 20 basis point reduction that came into effect when the Company closed the US portion of the acquisition of GE Capital’s fleet management business on August 31, 2015.

“These reductions in Element’s borrowing costs are an important deliverable in achieving the US$90 million to US$95 million annualized cost savings that we have targeted from the integration of the acquired GE fleet operations,” added Mr. Hudson.

Following the August 31, 2015 closing of the Company’s acquisition of the US operations of GE Capital’s fleet management business, Element’s committed funding facilities amounted to C$21.9 billion inclusive of the above referenced US$8.5 billion senior secured three-year credit facility. These facilities are supplemented with funding from the asset-backed securitization market which the Company has accessed to fund earning assets and revenue activities in its various business activities together with funding from its various private securitization conduits.