Fitch: 2Q Delinquencies Down for U.S. Timeshare ABS

NEW YORK--(BUSINESS WIRE)-- As often seen heading into summer, U.S. timeshare ABS delinquencies fell last quarter according to the latest index results from Fitch Ratings.

Total delinquencies for second quarter-2016 (2Q'16) declined to 3.28% from 3.58% in 1Q'16 but up notably from the 2.66% observed in 2Q'15. The fall follows three quarters of consecutive increases driven by overall sector-specific normalization. Seasonal trends have always taken hold since the inception of Fitch's index, with delinquencies decreasing every second quarter .

Timeshare default trends, however, typically lag those of delinquencies. Defaults increased last quarter to the highest level since 2Q'09. Defaults for 2Q'16 were 0.85%, up from 1Q'16 at 0.79% and 0.57% observed a year ago in 2Q'15. In fact, timeshare defaults have increased each of the last five quarters and remain elevated compared to pre-recessionary levels. On an annualized basis (rolling 12 months), defaults were 7.85% for 2Q'16, up from 7.29% for 1Q'16. This is the fourth quarterly increase after three years of consecutive quarterly declines.

Fitch expects some additional nominal increases in delinquencies and defaults in the near term as performance normalizes after recent year-over-year improvement. Fitch's 2016 Rating Outlook for timeshare ABS remains Stable due in part to the delevering structures found in timeshare transactions, resulting in ample credit enhancement levels.

Fitch's timeshare ABS index is an aggregation of performance statistics on pools of securitized timeshare loans originated by various developers. Expected cumulative gross defaults on underlying transactions can range from 9% to above 20%. While delinquencies and defaults may vary on an absolute basis, most transactions supporting the index exhibit similar overall trends.

The Fitch timeshare performance index summarizes average monthly delinquency (over 30 days) and gross default trends tracked in Fitch's database of timeshare asset backed securities (ABS) dating back to January 1997 and is available on a quarterly basis.

Fitch's quarterly index can be found at 'www.fitchratings.com' under the following headers:

Sectors then Structured Finance then ABS then ABS Indices then Timeshare

Additional information is available at 'www.fitchratings.com'.

ALL FITCH CREDIT RATINGS ARE SUBJECT TO CERTAIN LIMITATIONS AND DISCLAIMERS. PLEASE READ THESE LIMITATIONS AND DISCLAIMERS BY FOLLOWING THIS LINK: HTTP://FITCHRATINGS.COM/UNDERSTANDINGCREDITRATINGS. IN ADDITION, RATING DEFINITIONS AND THE TERMS OF USE OF SUCH RATINGS ARE AVAILABLE ON THE AGENCY'S PUBLIC WEBSITE 'WWW.FITCHRATINGS.COM'. PUBLISHED RATINGS, CRITERIA AND METHODOLOGIES ARE AVAILABLE FROM THIS SITE AT ALL TIMES. FITCH'S CODE OF CONDUCT, CONFIDENTIALITY, CONFLICTS OF INTEREST, AFFILIATE FIREWALL, COMPLIANCE AND OTHER RELEVANT POLICIES AND PROCEDURES ARE ALSO AVAILABLE FROM THE 'CODE OF CONDUCT' SECTION OF THIS SITE. FITCH MAY HAVE PROVIDED ANOTHER PERMISSIBLE SERVICE TO THE RATED ENTITY OR ITS RELATED THIRD PARTIES. DETAILS OF THIS SERVICE FOR RATINGS FOR WHICH THE LEAD ANALYST IS BASED IN AN EU-REGISTERED ENTITY CAN BE FOUND ON THE ENTITY SUMMARY PAGE FOR THIS ISSUER ON THE FITCH WEBSITE.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160823005927/en/

Fitch Ratings
Margaret Rowe
Director
+1-312-368-3167
Fitch Ratings Inc., 70 W. Madison Street, Chicago, IL 60602
or
John Bella
Managing Director
+1-212-908-0243
or
Media Relations:
Sandro Scenga, +1 212-908-0278
[email protected]

Source: Fitch Ratings

---

Serious News for Serious Traders! Try StreetInsider.com Premium Free!

---

You May Also Be Interested In

• Thousands Gather as Ashley for the Arts Delivers a Weekend of Music, Art and Meaningful Impact
• Research Solutions to Participate at Upcoming Investor Conferences
• Market Street Capital Inc. Leverages Expertise to Close the Financing Gap for First-of-a-Kind Energy Deals