–Class A at ‘Asf'; Outlook Stable;
–Class B at ‘BBBsf'; Outlook Stable.
KEY RATING DRIVERS
The affirmations to both classes of notes reflect performance within Fitch’s initial expectation, growth in hard credit enhancement (CE) since close, and available loss coverage consistent with the current ratings. The Stable Rating Outlooks reflect Fitch’s expectation that the notes will remain sufficiently enhanced to cover the stressed loss levels consistent with the current ratings.
Unanticipated increases in the frequency of defaults could produce CGD levels higher than the base case and would likely result in declines of CE and remaining default coverage levels available to the notes. Additionally, unanticipated increases in prepayment activity could also result in a decline in coverage. Decreased default coverage may make certain note ratings susceptible to potential negative rating actions, depending on the extent of the decline in coverage.
Fitch conducts sensitivity analysis by stressing both a transaction’s initial base case CGD and prepayment assumptions by 1.5x and 2.0x and examining the rating implications on all classes of issued notes. The 1.5x and 2.0x increases of the base case CGD and prepayment assumptions represent moderate and severe stresses, respectively, and are intended to provide an indication of the rating sensitivity of notes to unexpected deterioration of a trust’s performance.
USE OF THIRD-PARTY DUE DILIGENCE PURSUANT TO SEC RULE 17G-10
ABS Due Diligence-15E was not provided to, or reviewed by, Fitch in relation to this rating action.
Additional information is available at www.fitchratings.com.
Counterparty Criteria for Structured Finance and Covered Bonds (pub. 01 Sep 2016)
Criteria for Rating Caps and Limitations in Global Structured Finance Transactions (pub. 16 Jun 2016)
Criteria for Rating U.S. Timeshare Loan ABS (pub. 16 Jun 2016)
Global Structured Finance Rating Criteria (pub. 27 Jun 2016)
Elara HGV Timeshare Issuer 2014-A, LLC – Appendix
Dodd-Frank Rating Information Disclosure Form
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