Fitch Affirms Hilton Grand Vacations Trust 2014-A

CHICAGO--(BUSINESS WIRE)-- Fitch Ratings has affirmed both classes of Hilton Grand Vacations Trust 2014-A as follows:

--Class A at 'AAsf'; Outlook Stable;

--Class B at 'Asf'; Outlook Stable.

KEY RATING DRIVERS

The affirmation of both classes of notes reflects a gradual increase in loss coverage levels since close and is consistent with the current ratings. The Stable Outlook for both classes reflects the expectation for stable transaction performance in the next 12 to 18 months.

The ratings reflect the quality of Hilton Resorts Corporation's timeshare receivable originations, the sound financial and legal structure of the transaction, and the strength of the servicing provided by Hilton Worldwide, Inc.

Fitch will continue to monitor economic conditions and their impact as they relate to timeshare asset-backed securities and the trust level performance variables and update the ratings accordingly.

RATING SENSITIVITIES

Unanticipated increases in the frequency of defaults could produce cumulative gross default (CGD) levels higher than the base case. This would likely result in declines of credit enhancement and remaining default coverage levels available to the notes. Additionally, unanticipated increases in prepayment activity could also result in a decline in coverage. Decreased default coverage may make certain note ratings susceptible to potential negative rating actions, depending on the extent of the decline in coverage.

At the time of the initial rating, Fitch conducted sensitivity analysis stressing both the transaction's initial base case CGD and prepayment assumptions by 1.5x and 2.0x and examining the rating implications on all classes of issued notes. The 1.5x and 2.0x increases of the base case CGD and prepayment assumptions represent moderate and severe stresses, respectively. They are intended to provide an indication of the rating sensitivity of the notes to unexpected deterioration of a trust's performance.

DUE DILIGENCE USAGE

No third party due diligence was provided or reviewed in relation to this rating action.

Additional information is available at www.fitchratings.com.

Applicable Criteria

Counterparty Criteria for Structured Finance and Covered Bonds (pub. 14 May 2014)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=744158

Criteria for Rating U.S. Timeshare Loan ABS (pub. 03 Jun 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=866653

Criteria for Servicing Continuity Risk in Structured Finance (pub. 17 Dec 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=875586

Global Structured Finance Rating Criteria (pub. 06 Jul 2015)

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=867952

Related Research

Hilton Grand Vacations Trust 2014-A -- Appendix

https://www.fitchratings.com/creditdesk/reports/report_frame.cfm?rpt_id=749987

Additional Disclosures

Dodd-Frank Rating Information Disclosure Form

https://www.fitchratings.com/creditdesk/press_releases/content/ridf_frame.cfm?pr_id=1003618

Solicitation Status

https://www.fitchratings.com/gws/en/disclosure/solicitation?pr_id=1003618

Endorsement Policy

https://www.fitchratings.com/jsp/creditdesk/PolicyRegulation.faces?context=2&detail=31

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View source version on businesswire.com: http://www.businesswire.com/news/home/20160429005684/en/

Fitch Ratings
Surveillance Analyst
Andrew Tinari
Associate Director
+1-312-368-3127
Fitch Ratings, Inc.
70 W. Madison St.
Chicago, IL 60602
or
Committee Chairperson
Hylton Heard
Senior Director
+1-212-908-1214
or
Media Relations:
Alyssa Castelli, +1 212-908-0540
[email protected]
Elizabeth Fogerty, +1 212-908-0526
[email protected]

Source: Fitch Ratings

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