Volvo is coming out with a deal backed by loans on trucking and construction equipment.

Volvo Financial Equipment Series 2016-1 consists of $663 million of bonds, according to a presale from Fitch Ratings.

The deal is the sixth of its kind from VFS US, a financing unit of the Swedish carmaker AB Volvo.   

Previous transactions have performed well. Cumulative net losses on the outstanding securitizations are projected to be below 1.00%.

The Class A notes consist of three tranches, sized at $186 million each. The A-1 money-market tranche matures on Feb. 15 2017, while the A-2 piece is due on Oct. 15, 2018 and the A-3 piece on Feb. 15, 2020.

Credit enhancement—the cushion against losses—for the A class is 10.35%. For the B notes it’s 7.65% and for the C notes 4.65%.

Loans on trucks account for 83.86% of the collateral, and construction equipment for 16.14%.

In terms of geographic concentration, some 13.58% of the borrowers behind this deal are located in Texas. The next largest contributor to the pool is California, with 8.04%, and then Florida, with 5.20%.

Societe Generale is the lead arranger on the transaction.       

Fitch rates AB Volvo ‘BBB.’

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