Volvo Financial Services is marketing a $642 million equipment lease securitization.
The deal called Volvo Financial Equipment LLC, Series 2012 -1 is backed by transportation and construction equipment loans.
Moody's Investors Service has assigned a preliminary rating of 'Aaa' to the class A-1, A-2 , A-3 and A-4 notes. The capital structure will also include a class B tranche rated 'Aa1' and a class C tranche rated 'Aa3'.
VFS is the U.S.-based global captive finance subsidiary of Sweden-based AB Volvo. In the U.S., VFS supports AB Volvo's sales of trucking and construction equipment, which are sold under the Volvo and Mack brands.
VFET 2010-1 was the first securitization sponsored by VFS. Moody's noted in a presale report that both the transportation and equipment sectors have significantly improved since that debut issue, both in delinquencies and losses.
There has also been better-than-expected performance on the VFET 2010-1 transaction whose class B was recently upgraded by Moody's to 'Aaa' from 'Aa2'.