CHICAGO, IL (March 6, 2012) — U.S. timeshare delinquencies rose over the last three months of 2011, as expected, but remained consistent with those of a year ago, according to the latest timeshare ABS index from Fitch Ratings. Fitch expects continued near term stability for both timeshare ABS performance and ratings.
Total delinquencies for 4Q’11 were 3.82%; up from 3.56% in 3Q’11. This reflects the seasonal deterioration that takes hold in the winter months. Year over year, total delinquencies decreased only nominally from 3.85% in 4Q’10, as timeshare loan delinquencies have settled back to historical levels after reaching all-time highs in 2008 and 2009.
Also consistent with seasonal trends, defaults for 4Q’11 increased to 0.75% from 0.62% in 3Q’11. However, unlike delinquencies, defaults have increased year-over-year and from 0.62% the same period last year.
Due to the de-levering structure of the timeshare transactions 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 then Structured Finance then ABS then ABS Indices then Timeshare
Additional information is available at ‘www.fitchratings.com‘
SOURCE: Fitch Ratings