Element Announces Inaugural Equity Residual Transaction, Expanding Strategic Funding Capabilities

Executive Summary

• Element Fleet Management completed a $670 million asset-backed security (ABS) note offering and sold corresponding equity residuals tied to a portfolio of U.S. fleet lease receivables.
• The transaction marks the company's inaugural ABS issuance under the Chesapeake IV program and its first sale of equity residuals in connection with an ABS offering, structured under a "discrete pool" collateral framework.
• The deal secures a three-year funding commitment with Blackstone Credit & Insurance and CPP Investments, providing off-balance sheet capital that reduces the pro forma debt-to-capital ratio from 76.4% to 74.9%.

Key Details

• Gross proceeds of $670 million from the ABS note offering and sale of corresponding equity residuals.
• Collateralized by a portfolio of U.S. fleet lease receivables under Element’s Chesapeake IV program.
• Structured as a “discrete pool” collateral arrangement; inaugural ABS note issuance and first sale of equity residuals in connection with an ABS offering for the Company.
• Strategic three-year commitment secured with Blackstone Credit & Insurance and Canada Pension Plan Investment Board (CPP Investments) through CPPIB Credit Investments Inc.
• Pro forma debt-to-capital ratio expected to decline from 76.4% (as of Q1 2026) to 74.9%, providing additional balance sheet flexibility.
• Proceeds and structure intended to provide off-balance sheet funding, reduce leverage, and diversify/optimize the Company’s funding profile to support client growth and long-term shareholder value.
• Financial advisor: CIBC Capital Markets (exclusive advisor to Element); legal counsel for Blackstone: Mayer Brown.

Notable Quotes

• Marc St-Onge, Senior Vice President and Treasurer at Element: “Element is pleased to enter into this relationship with strong partners such as Blackstone and CPP Investments. This transaction represents an important evolution in our funding strategy, providing another tool to support the Company’s growth while enhancing our ability to serve clients. We appreciate the confidence that Blackstone and CPP Investments have shown in the strength of our lease portfolio and look forward to building on these relationships as we continue to diversify our sources of capital and execute on our long-term growth objectives.”
• Aneek Mamik, Head of Financial Services for Asset Based Finance at Blackstone Credit & Insurance: “Element has built a high-quality fleet leasing platform supported by strong origination capabilities, long-standing client relationships and attractive underlying assets. We are pleased to support Element’s growth with this expanded relationship and augment our investments financing the real economy with hard asset-backed collateral.”
• Paras Viras, Managing Director, Americas Structured Credit at CPP Investments: “This investment aligns with our strategy of partnering with leading businesses and deploying long-term capital into high-quality asset-backed opportunities. We are pleased to support Element's continued growth through this strategic relationship as we aim to generate attractive risk-adjusted returns for the CPP Fund in the interests of CPP contributors and beneficiaries.”