A $679-million equipment-loan deal from Volvo is rounding the bend, according to a pre-sale report from Standard & Poor’s.
Scheduled to close March 5, 2014, the deal consists of six tranches. (See further below for a table of the size, S&P rating and maturity of each tranche.)
JP Morgan and Royal Bank of Scotland are arranging the transaction, which securitizes equipment loans backed by commercial trucks and construction equipment. The originator and servicer is VFS US.
The A classes have a subordination of 12.6%, the B series of 10.35% and the C of 7.55%.
S&P said the deal could “withstand 1.5x our expected net loss level in our what if’ scenario analysis before becoming vulnerable to a negative CreditWatch action or a potential downgrade.”
The deal is fourth Volvo equipment-loan deal rated by S&P. The transaction resembles the last one, 2013-1, with some tweaks, including a slightly higher share of loans to financing of small and medium truck fleets.