NEW YORK (September 18, 2013) — Quarterly U.S. timeshare ABS delinquencies fell to the lowest level since 2007, according to the latest index results from Fitch Ratings.
Total delinquencies for second quarter-2013 (2Q’13) were 3.05%, down from 3.27% in 1Q’13 and 3.29% in 2Q’12. Delinquencies have largely normalized at their historical levels following the dramatic increases of 2008 and 2009.
Defaults for 2Q’13 remained consistent with 1Q’13, finishing at 0.72%. However, they are down from the 0.82% observed at the same time last year. That said, defaults remain elevated from pre-recessionary levels. Some of the recent 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.
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
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