Element Financial Announces an Increase of the Previously Announced Offering of Cumulative 5-Year Rate Reset Preferred Shares to $125 Million

TORONTO, ONTARIO--(Marketwired - Feb. 26, 2014) -

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This news release does not constitute an offer to sell or a solicitation of an offer to buy any of the securities in the United States. The securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") or any state securities laws and may not be offered or sold within the United States or to U.S. Persons unless registered under the U.S. Securities Act and applicable state securities laws or an exemption from such registration is available.

Element Financial Corporation (TSX:EFN) ("Element" or the "Company") is pleased to announce that it has amended the terms of its previously announced bought deal offering of Cumulative 5-Year Rate Reset Preferred Shares, Series C of Element ("Series C Preferred Shares") to increase the size of such offering to $125.0 million (the "Offering").

Under the amended terms of the Offering, a syndicate of underwriters co-led by GMP Securities L.P, National Bank Financial Inc., BMO Capital Markets, CIBC World Markets, RBC Capital Markets and TD Securities Inc. and including Desjardins Securities Inc., Raymond James Ltd. and Manulife Securities Inc. (collectively, the "Underwriters") have agreed to purchase, on a bought deal basis, an aggregate of 5,000,000 Series C Preferred Shares at a price of $25.00 per Series C Preferred Share for total gross proceeds of $125.0 million.

Holders of the Series C Preferred Shares will be entitled, as and when declared by the Board of Directors of the Company, to receive a cumulative quarterly fixed dividend for the initial five-year period ending June 30, 2019 of 6.50% per annum. Thereafter, the dividend rate will reset every five years to an annual dividend rate equal to the 5-Year Government of Canada Bond Yield as quoted on Bloomberg on the 30th day prior to the first day of the relevant subsequent five year fixed rate period plus 4.81%. Holders of the Series C Preferred Shares will have the right to convert their shares into Cumulative Floating Rate Preferred Shares, Series D of the Company (the "Floating Rate Series D Preferred Shares"), subject to certain conditions and the Company's right to redeem the Series C Preferred Shares, on June 30, 2019 and on June 30 every five years thereafter.

Holders of the Floating Rate Series D Preferred Shares will be entitled to receive a quarterly floating rate dividend, as and when declared by the Board of Directors of the Company, equal to the then current three-month Government of Canada Treasury Bill yield plus 4.81%. Holders of the Floating Rate Series D Preferred Shares may convert their Floating Rate Series D Preferred Shares into Series C Preferred Shares, subject to certain conditions and the Company's right to redeem the Floating Rate Series D Preferred Shares, on June 30, 2024 and on June 30 every five years thereafter. The Series C Preferred Shares will not be rated.

The Company has granted to the Underwriters an option (the "Over-Allotment Option"), which may be exercised at any time for a period of 30 days following the closing of the Offering, to purchase at the issue price an additional 250,000 Series C Preferred Shares for additional gross proceeds of up to $6.25 million. In the event that the Over-Allotment Option is exercised in its entirety, the aggregate gross proceeds of the Offering will be $131.25 million.

The proceeds of the Offering, including any proceeds from the exercise of the Over-Allotment Option, will be used to originate and finance, directly or indirectly, finance assets as well as for general corporate purposes. The Offering is expected to close on March 7, 2014 and is subject to certain conditions including, but not limited to, the receipt of all necessary regulatory approvals including the approval of the Toronto Stock Exchange.

About Element Financial Corporation

With total assets in excess of $4.0 billion as of February 20, 2014, Element Financial Corporation is one of North America's leading independent equipment finance companies. Element operates across North America in four verticals of the equipment finance market - Commercial and Vendor Finance, Fleet Management, Aviation Finance and Rail Finance.

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, including, among others, statements regarding the issuance of the Series C Preferred Shares and the use of proceeds from the Offering, new originations in the current quarter, the anticipated pipeline of prospective transactions, and proposed purchases of portfolios of finance assets. 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, risks related to completion of the proposed purchases of portfolios of finance assets, 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.