Fitch: U.S. Timeshare Delinquencies Remain Low; Defaults Up Modestly

CHICAGO--(BUSINESS WIRE)-- U.S. timeshare ABS delinquencies were stable in the first quarter and remain within historically normal levels, according to the latest monthly index results from Fitch Ratings.

Total delinquencies for first quarter-2015 (1Q'15) were 2.90%, consistent with 2.89% in 4Q'14 but below the 3.19% observed in 1Q'14. Fitch has observed consistent year-over-year improvement since 2012.

Defaults increased slightly in 1Q'15, as is typical of winter performance. Defaults for 1Q'15 were 0.68%, up from 4Q'14 at 0.55% and up just slightly from 0.65% observed a year ago in 1Q'14. Although they are still somewhat elevated compared to pre-recessionary levels, defaults have displayed overall modest improvement over the last three years.

On an annualized basis (rolling 12 months), defaults were 6.55% for 1Q'15, down from 6.73% for 4Q'14. This represents three years of consecutive quarterly improvement as well as the lowest level of defaults for timeshare ABS in six years.

Fitch's Rating Outlook for timeshare ABS remains Stable due in part to the delevering structures found in timeshare transactions and 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 >> Structured Finance >> ABS >> ABS Indices >> 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/20150519007044/en/

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

Source: Fitch Ratings

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