Total delinquencies for third quarter-2015 (3Q’15) were 2.96%, up from 2.66% in 2Q’15 and the 2.79% observed in 3Q’14. This is the first year-over-year increase since 2013.
Defaults also increased in 3Q’15, and compared to a year ago. Defaults for 3Q’15 were 0.59%, up slightly from 2Q’15 at 0.57% and 0.53% observed a year ago in 3Q’14. Although they remain slightly elevated compared to pre-recessionary levels, defaults have displayed overall improvement over the last three years.
On an annualized basis (rolling 12 months), defaults were 6.64% for 3Q’15, up from 6.49% for 2Q’15. This again represents the first increase after three years of consecutive quarterly improvement.
Fitch expects some additional nominal increases in delinquencies and defaults in the near term as performance normalizes after recent year-over-year improvement. Fitch’s 2016 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 then Structured Finance then ABS then ABS Indices then Timeshare
Additional information is available at ‘www.fitchratings.com’.
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SOURCE: Fitch Ratings
Fitch Ratings Inc., 70 W. Madison Street, Chicago, IL 60602
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