NEW YORK (May 21, 2013) — U.S. timeshare ABS delinquencies dropped again last quarter and are also lower than levels seen this time last year, according to the latest timeshare index results from Fitch Ratings.
Total delinquencies for first quarter-2013 (1Q’13) were 3.27%, down from 3.55% in 4Q’12 and 3.58% in 1Q’12. The improvement in timeshare ABS delinquencies last quarter is typical of springtime performance.
Defaults for 1Q’13 also decreased to 0.72% from 0.75% in 4Q’12. Delinquencies are 0.82% lower than levels seen at the same time last year. While improvement this quarter is evident across all issuers, some of the overall improvement is attributed to slight shifts in the composition of the index. Transactions from issuers with lower historical delinquency and default rates were added in 2012.
Delinquency trends have largely normalized at their historical levels following the dramatic increases that occurred in 2008 and 2009. However, defaults still remain elevated from pre-recessionary levels.
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 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‘.