The decline in delinquencies reflects not only historical seasonal improvement that timeshare loans usually see in the spring, but improvement year-over-year. “Though still above historical norms, U.S. timeshare ABS delinquencies are slowly migrating back to pre-recession levels,” said Director Brad Sohl.
Total delinquencies for 1Q’10 were 4.64%, down from 4.89% at the end of 4Q’09, following seasonal patterns typically seen in timeshare ABS. Meanwhile, delinquencies decreased by approximately 15% from 5.43% in 1Q’09.
Monthly defaults remained at .83% in March 2010, consistent with .83% in 4Q’09 and .81% for 1Q’09. On an annualized basis (rolling 12 months), defaults were 9.53% for the index in March, higher than the 9.44% observed in 4Q’09. March’s annualized default rate was, however, slightly lower than the rate for the prior two months.
Due to the expected stable performance and ample credit enhancement levels, Fitch’s Rating Outlook for Timeshare ABS remains Stable.
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 10% 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
Brad Sohl, +1-312-368-3127 (Chicago)
Du Trieu, +1-312-368-2091 (Chicago)
John Bella, +1-212-908-0243 (New York)
Sandro Scenga, +1-212-908-0278 (Media Relations, New York)
SOURCE: Fitch Ratings