Volvo priced $622 million of notes backed by transportation equipment loans and leases according to a person familiar with the transaction.
Citigroup and J.P. Morgan were the lead underwriters of the deal, Volvo Financial Equipment LLC, Series 2013-1.
A $184 million money market class rated 'P-1 by Moody’s Investors Service was priced to yield 0.26%.
An ‘Aaa’-rated, $185 million tranche maturing in November 2015 was priced at 18 basis points over the eurodollar synthetic forward curve (EDSF).
An ‘Aaa’-rated, $179 million tranche maturing in March 2017 was priced at 32 basis points over EDSF;
An ‘Aaa’-rated, $69.59 million tranche maturing in August 2019 was priced at 40 basis points over the interpolated swaps curve.
VFET 2013-1 is the third securitization sponsored by Volvo Financial Services, the U.S. based global captive finance subsidiary of Sweden's AB Volvo.
In its presale report, Moody's noted that, from a collateral standpoint, VFET 2013-1 is slightly weaker than Volvo's previous equipment loan securitization, with more small fleet loans (10% versus 3%) being the biggest factor.
"Historically, loans made to obligors in the small fleet segment have shown worse credit performance than those made to obligors in the medium/large fleet segment." the ratings agency said.
