CHICAGO, IL (May 21, 2015) — U.S. timeshare ABS delinquencies were stable in the first quarter and remain within historically normal levels, according to the latest monthly index results from Fitch Ratings.
Total delinquencies for first quarter-2015 (1Q’15) were 2.90%, consistent with 2.89% in 4Q’14 but below the 3.19% observed in 1Q’14. Fitch has observed consistent year-over-year improvement since 2012.
Defaults increased slightly in 1Q’15, as is typical of winter performance. Defaults for 1Q’15 were 0.68%, up from 4Q’14 at 0.55% and up just slightly from 0.65% observed a year ago in 1Q’14. Although they are still somewhat elevated compared to pre-recessionary levels, defaults have displayed overall modest improvement over the last three years.
On an annualized basis (rolling 12 months), defaults were 6.55% for 1Q’15, down from 6.73% for 4Q’14. This represents three years of consecutive quarterly improvement as well as the lowest level of defaults for timeshare ABS in six years.
Fitch’s Rating Outlook for timeshare ABS remains Stable due in part to the delevering structures found in 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 9% 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
Fitch Ratings Inc.
Margaret Rowe, +1-312-368-3167
70 W. Madison
Chicago, IL 60602
John Bella, +1-212-908-0243
Sandro Scenga, New York