CHICAGO, IL (October 26, 2012)–Fitch Ratings expects to rate Sierra Timeshare 2012-3 Receivables Funding LLC as detailed below.
–$208,570,000 class A notes ‘Asf'; Outlook Stable;
–$66,430,000 class B notes ‘BBBsf'; Outlook Stable.
Fitch’s stress and rating sensitivity analysis are discussed in the presale report titled ‘Sierra Timeshare 2012-3 Receivables Funding LLC, dated July 9, 2012, which is available on Fitch’s web site. The presale report details how Fitch addresses the key rating drivers which are summarized below.
Consistent Collateral: Approximately 68.3% of Sierra 2012-3 consists of WVRI-originated loans, and the remaining 31.7% are WRDC loans. In reviewing managed portfolio data that exclude sub-600 obligors, Fitch has determined that, on a like-for-like FICO basis, WRDC’s receivables perform better than WVRI’s.
Continued Weak WVRI Performance: Similar to other timeshare originators and other consumer asset types, Wyndham delinquency and default performance exhibited notable increases in the 2007-2008 vintages. While more recent vintages are displaying improved performance under the WRDC platform, the improvement is not evident under the WVRI platform.
Decreased Weighted Average Seasoning: The weighted average seasoning (WAS) of the 2012-3 collateral is six months, a decrease from 2012-2 at eight months. Pools with higher seasoning may experience lower cumulative gross defaults (CGDs) relative to less seasoned pools, as seasoned pools have incurred a significant portion of their losses prior to their inclusion in a securitization.
Quality of Origination/Servicing: Wyndham Worldwide has demonstrated sufficient abilities as an originator and servicer of timeshare loans. This is evidenced by the historical delinquency and loss performance of securitized trusts and of the managed portfolio.
Legal Structure Integrity: The legal structure of the transaction should provide that a bankruptcy of Wyndham Worldwide and Wyndham Consumer Finance, Inc. (WCF) would not impair the timeliness of payments on the securities.
Additional information is available at ‘www.fitchratings.com‘. The ratings above were solicited by, or on behalf of, the issuer, and therefore, Fitch has been compensated for the provision of the ratings.
Applicable Criteria and Related Research:
–‘Criteria for Rating U.S. Timeshare Loan ABS’ dated June 13, 2012′;
–‘Global Structured Finance Rating Criteria’ dated June 6, 2012.
Applicable Criteria and Related Research: Sierra Timeshare 2012-3 Receivables Funding LLC (US ABS)
Criteria for Rating U.S. Timeshare Loan ABS
Global Structured Finance Rating Criteria
SOURCE: Fitch Ratings