NEW YORK (August 6, 2014) — U.S. timeshare ABS delinquencies fell again this past quarter to their lowest level in seven years, according to the latest index results from Fitch Ratings.
Total delinquencies for second quarter-2014 (2Q’14) were 2.92%, down from 3.19% in 1Q’14 and 3.05% in 2Q’13. This marks two years of consistent year-over-year improvement. Furthermore, this is the lowest level of delinquencies reported by the Fitch index since 2007.
Defaults are consistent with last quarter, but are also showing year-over-year improvement. Defaults for 2Q’14 were 0.66%, a slight increase from 1Q’14 at 0.65%, but down from the 0.72% observed a year ago for 2Q’13. However, default levels remain somewhat elevated compared to pre-recessionary levels.
On an annualized basis (rolling 12 months), defaults were 7.45% for 2Q’14, down from 7.73% for 1Q’14. This represents the eighth consecutive quarter of improvement as well as the lowest level of defaults for timeshare ABS in over four 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 then Structured Finance then ABS then ABS Indices then Timeshare
Additional information is available at ‘ www.fitchratings.com ‘.
SOURCE: Fitch Ratings
Brad Sohl, +1 212-908-0792
Fitch Ratings Inc., 33 Whitehall Street, New York, NY, 10004
Margaret Rowe, +1 312-368-3167
John Bella, +1 212-908-0243
Sandro Scenga, +1 212-908-0278