CHICAGO, IL (June 5, 2012) — Delinquencies have dropped again this spring for U.S. timeshare ABS and remain consistent with those of a year ago, according to the latest timeshare index results from Fitch Ratings.
Total delinquencies for first-quarter 2012 (1Q’12) were 3.58%, down from 3.82% in 4Q’11. However, year-over-year total delinquencies increased nominally from 3.49% in 1Q’11. This provides further support that delinquencies have settled closer to their historical levels following an improving trend that came on the heels of dramatic increases in 2008 and 2009.
Also consistent with seasonal trends, defaults for 1Q’11 increased to 0.82% from 0.75% in 4Q’11. Timeshare default trends typically lag those of delinquencies. Defaults have also remained relatively consistent year-over-year, increasing only nominally from 0.79% during the same period last year.
Fitch’s Rating Outlook for timeshare ABS remains Stable due largely to the delevering structures found in many 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 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
Additional information is available at ‘ www.fitchratings.com ‘.
SOURCE: Fitch Ratings